South Carolina venture capital and small business loan programs will soon be able to benefit from more than $ 101 million in funding for the US’s State Rescue Plan, according to Sen. Tim Scott’s Assistant Legislative Assistant.
The fund is part of the $ 10 billion funding from the State Small Business Credit Initiative provided to states, the District of Columbia, the United States and tribal governments when ARPA signed into law March 11, 2021.
The SSBCI program first started in 2010 and lasted until 2017, during which the Economic Development Services Council described it as “one of the most successful federal programs to extend access to capital mechanisms at the time.” It has provided $ 1.4 billion in financing to more than 16,900 small businesses. After a four-year hiatus, ARPA brought the program back to life.
According to Reyes, the renewed version of the program, like its predecessor, will target venture capital, access, equity and loan schemes, as well as collateral support initiatives by governments, financial institutions and community or financial development organizations.
Borrowing schemes allow public institutions to buy interest on a loan or to lend to small businesses alongside private lenders. Loan guarantee programs allow public entities to use SSBCI funding to support lenders with at least half the amount owed to them in the event of a borrower defaulting, according to the US Treasury Department. Fund access programs differ from other fund offers by supplementing a loan loss reserve fund for both the lender and the borrower with SSBCI funds.
States submitted application forms to the US Treasury Department on February 11, and the US Treasury Department extended the application deadline to May 11 for tribal governments such as Rock Hill Catawba Nation.
All jurisdictions, except tribal governments, must apply to the Treasury Department for technical assistance by June 30, but as of publication, the application instructions had not yet been posted on the Treasury Department website – it is still the best source of information for SSBCI, according to Reyes.
“They provide a lot of useful resources that analyze it,” he told representatives of the credit union and community development who were present in Ten at the Top 16 Upstate Entrepreneur Ecosystem meeting on March 16.
According to the website, approximately $ 56 million in SSBCI funding will be allocated to South Carolina Main Capital, $ 4 million to micro-venture capital, and $ 26 million to private equity or socially disadvantaged businesses. are called “SEDI companies”. by the Ministry of Finance. The state will have initial access to $ 14 million.
As of March 3, the Treasury Department began collecting demographic data from participating jurisdictions on the race, nationality, sexual orientation, and gender identity of small business owners to measure the impact of the program on SEDI businesses.
“The design of the State Small Business Credit Initiative is intended to help correct the unfortunate reality that underprivileged communities have faced historically greater barriers to accessing funds than others, preventing them from pursuing their business ideas and ambitions,” he said. US Treasury Wally Adeyemo. a press release. “This new report will give the Ministry of Finance the information we need to assess the impact of this program on communities across the country and work to provide those communities with the capital they need to realize their business visions.” .
Reach Molly Hulsey at 864-720-1223.