The NC Rural Center has been designated as the agency in the Tar Heel State that will manage North Carolina’s nearly $202 million in federal funding under the latest version of “State Small Business Credit Initiative.” Frequently referred to as SSBCI 2.0, round two continues an initiative first established by the Small Business Jobs Act of 2010 and now funded through the American Rescue Plan Act (ARPA).
In Tennessee, the funding is a little more than $110 million.
North Carolina’s plan includes three components:
- The “Loan Participation Program” would support local lenders across North Carolina with $160 million to help expand access to capital for small businesses. By partnering with commercial banks and CDFIs, this program would help small businesses obtain financing to help them grow and expand by providing small business loans with reduced down payments, which helps lenders make loans that are typically outside of their lending guidelines, reducing their risk of exposure.
- The “Capital Access Program” would work directly with local lenders (banks, credit unions, and Community Development Financial Institutions) to create capital opportunities with $10 million for entrepreneurs who might not otherwise qualify by providing matching loan loss reserves for loans that fall just outside a lending institution’s normal underwriting standards, depositing the funds into a pooled account at the participating institution.
- The “NC Venture Capital Program” would support early stage high-growth small businesses in North Carolina with $31.9 million, primarily through equity investments by working with fund managers to create equity investment opportunities for startups throughout the state.
The NC Rural Center modeled SSBCI 2.0 after the initiative that originated from the Small Business Jobs Act of 2010 that went to loan and collateral support programs for companies hurt by the Great Recession.
“Since the launch of this program in 2011, we have leveraged almost $1 billion in private funds and have created or retained more than 16,000 jobs throughout the state,” said Armeer Kenchen, Executive Director of the Small Business Credit Initiative and CornerSquare Community Capital. “We are proud that in the first SSBCI round, the North Carolina program ranked second in the country in amount of private financing leveraged, and third in the country in the number of loans made to businesses owned by women and people of color. This new initiative has the potential to support thousands of small businesses through these proven lending programs, and we’re very excited about the impact that will have on our state and local communities.”