For small businesses rebounding from – or born out of – the global pandemic, financial resources are in high demand. That’s why the State Small Business Credit Initiative (SSBCI) is distributing $10 billion in funding across all 50 states and territories in the United States. This transformative funding is being rolled out over time and is given on a first-come-first-serve basis. Therefore, small business owners must move quickly to learn about their state’s SSBCI program.
Montana is part of the first wave of states that have opened their SSBCI programs for applications.
The state has secured $61.3M in SSBCI funding for its small businesses. In addition to supporting existing small businesses, Montana’s SSBCI funding is committed to helping rural and Native American entrepreneurs create small businesses.
📍 If you're in a different state, you can add your email here to be the first to know when your state opens up applications.
What kinds of funding can Montana businesses receive?
Each state has created its own plan for distributing SSBCI funds. While some states are using venture capital programs or equity investment programs, Montana has elected to streamline its process and only distribute SSBCI funding through loan participation programs.
Loan Participation Program: This structure allows the state to provide direct lending to small businesses in partnership with lending companies.
Which SSBCI programs are open now in Montana?
While some states have more than one SSBCI program, Montana has just one: the Montana State Small Business Credit Initiative 2.0 Loan Participation Program (LPP).
This is good news for small business owners in Montana – you will not have to labor over multiple options to determine which opportunity is right for your business. Here’s what to know about the program:
The LPP will award funding to small businesses that aim to stabilize, pivot, expand, or re-start their business. It will also award funding to new Montana business owners who are entering and establishing themselves in the market.
The LPP will only be partnering with approved economic development organizations throughout the state. Small businesses must have an approved CDFI lender in order to apply for SSBCI funding (see below for how to choose a lender).
What are the available interest rates?
Before you apply, it’s imperative that you understand the available interest rates. As you navigate the application process, you will encounter “basis points,” which are just another way to conceptualize interest rates – and the differences between different options.
Here are all of the different plans used by the approved CDFI lenders:
- Up to 3-year term with monthly payments – 50 basis points (0.50%)
- 3-year up to 5-year term with monthly payments – 100 basis points (1.00%)
- 5-year up to 7-year term with monthly payments – 150 basis points (1.50%)
- 7-year up to 10-year term with monthly payments – 200 basis points (2.00%)
- 10-year up to 15-year term with monthly payments – 250 basis points (2.50%)
- 15-year to 20-year term with monthly payments – 300 basis points (3.00%)
What businesses are eligible for SSBCI funding?
The eligibility requirements are generously open-ended for SSBCI funding in Montana. Funding is not restricted to a certain industry.
Your business will be eligible for SSBCI funding in the state of Montana if:
- It has fewer than 750 employees
- Your desired loan amount is $5M or less.
What can the funding be spent on?
The American Rescue Plan of March 2021 funded the SSBCI with the intent to provide support and relief to small business owners hurt by the pandemic. The SSBCI has also set out to address systemic inequalities that pervade entrepreneurial spaces by helping underrepresented small business owners access capital. Therefore, funding must be spent on business purposes. This includes:
- Working capital
- Equipment and inventory
- Start-up costs
- Term loan financing
- Lines of credit
- Trade cycle financing
- Purchase or construction renovations of non-passive real estate
What CAN’T the funding be spent on?
- Passive real estate investment
- Speculative activities, gambling
- Pyramid sales
- Activities prohibited by Federal or State law
How to apply for SSBCI funding in Montana:
To apply for SSBCI funding in Montana, small business owners must first contact the approved CDFI lender they wish to work with.
Then, business owners will utilize an application portal through Montana.gov. While the portal itself is user-friendly, it requires users to also register with Okta, a secure user authorization platform.
If you’re unfamiliar with Okta, you may have significant questions about how to navigate your application. Our Client Success Managers are experts on Okta and can answer any of your questions when you book a call with Skip.
You will also need significant documentation to apply for funding. There will be no shortage of forms to obtain and complete – both for you, the borrower, and the approved CDFI lender you choose to work with. Since you do not want to rush the documentation process, it’s a good idea to start your application soon and give yourself ample time to complete it.
Common challenges in applying for SSBCI funding:
The number one challenge in applying for SSBCI funding in Montana is that, before you apply, you need to determine which participating lender you are going to work with.
So far, over 15 different lenders have been approved to work with this SSBCI program.
Each lender has its own process and will serve its own niche of Montana business owners. Thoroughly researching each potential lender will be a time-consuming and at times overwhelming process, even for the most in-the-know business owners. There is an enormous amount of information to sift through.
Luckily, to help you conserve your time, energy, and resources, our Client Success Managers have already learned the ins and outs of each approved CDFI lender. If you need help considering your options, you can book a call to receive a thorough consultation.
Applying for SSBCI funding can be hard work – but it has the potential to significantly transform your business. We are here to support you along every step of your funding journey.