It’s no secret that small businesses have suffered since the pandemic. To mitigate these effects, the State Small Business Credit Initiative (SSBCI) is distributing $10 billion in funding across all 50 states and territories in the United States. Each state has a rollout plan, and Pennsylvania has opened its first SSBCI program this month. It’s time for business owners to start preparing applications.
Pennsylvania has been awarded $125M for its SSBCI loan participation program. The state will use this capital to extend loans to small businesses through certified economic development organizations with the intent that small businesses will use the loans to expand and create more jobs in Pennsylvania.
📍 Do you need help applying for financing for your small business in Pennsylvania? We can help you with 1 on 1 service. Book a call or sign up now.
What kinds of funding can Pennsylvania businesses receive?
SSBC funds are distributed in several ways: Loans, equity, and venture capital programs. Each state decides what type of funding will be utilized.
Right now, Pennsylvania is distributing funds through loan participation programs. The state’s equity and venture capital programs are only open to CDCs and Lenders.
Here’s what to know:
Loan Participation Program: This structure allows the state to provide direct lending to small businesses in partnership with lending companies such as certified economic development organizations.
Which SSBCI programs are open now in Pennsylvania?
Right now, the Pennsylvania State Small Business Credit Initiative (PA-SSBCI) program is accepting applications.
The PA-SSBCI provides funding to certified economic development partners. Then, these partners can administer loans to small businesses, meaning that business owners have to apply for funding directly through certified economic development partners.
Business owners must work with certified economic development partners that the PA-SSBCI has approved. The state created a spreadsheet of the participating partners to help business owners decide who to work with. It’s searchable by county so you can find partners in your area. You can access the spreadsheet here.
📍 Do you need help determining which economic development partner is the best fit for your Pennsylvania business? We can help you with 1 on 1 service. Book a call or sign up now.
Which businesses are eligible for SSBCI funding?
Since a wide variety of certified economic development organizations will distribute the funding, eligibility requirements will vary.
As a rule, businesses must be based in Pennsylvania. Additionally, for each dollar funded by PA-SSBCI, one dollar should be from a non-governmental source.
What can the funding be spent on?
Pennsylvania is distributing funding with the goal that these loans will help small businesses grow and expand while also creating more local jobs. Therefore, funding must be spent on legal business purposes. This includes but is not limited to:
- Working capital
- Receivables
- 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 Pennsylvania:
To apply for SSBCI funding in Pennsylvania, businesses must contact an approved certified economic development partner from their county.
These partners are organized on this spreadsheet, which also provides the appropriate contact information for each partner.
However, there are some things to know before reaching out.
Each partner will have its own application process, but you will run into an intense documentation process across the board. Therefore, you should start organizing your documents now. You’ll need:
- a business plan
- your business tax returns from the last two years
- your personal tax returns
- a personal financial statement
- business projections for the next five years
- a funding statement
- a list of business liabilities
Some partners will require additional documents and forms, too. Proper documentation is essential to a smooth and successful application process. Therefore, you must take your time and reach out for help if you need it. Our Client Success Managers are here to support you.
📍 If you need assistance with your documentation, we can help. Book a call or sign up now.
Common challenges in applying for SSBCI funding:
The most challenging part of securing SSBCI funding is choosing a participating lender to work with and preparing your business plan and business projections.
Each of these tasks is time-consuming, and the stakes are high. You want to be thorough, but you also don’t want to get overwhelmed.
To help you save time, our Client Success Managers have already learned the ins and outs of finding the right lender in Pennsylvania. Plus, our Client Success Managers are experts in preparing effective business plans. If you need support, you can book a call for a personal consultation. You don’t have to go through this process on your own.
Navigating the application process is challenging but it’s worth the labor to help your business recover and grow. Here at Skip, we’re on your team.