Senate bill would rescind $2.3 billion in SSBCI funding
The State Science and Technology Institute reports that legislation was introduced this past week in the Senate that would rescind $2.3 billion from the “State Small Business Credit Initiative” (SSBCI).
In its weekly SSTI Digest, the organization wrote that the purpose of the action would be to source funds for an additional $10 billion for new COVID expenses; the Senate proposal opts to reduce selected unspent funds from American Rescue Plan Act and CARES Act programs. The cut to SSBCI is targeted at states’ potential third tranches of program funds, as well as 40 percent of the overall SSBCI technical assistance funding.
The language about SSBCI would produce the following effects:
- States would lose the ability to access a third tranche of general capital funds (about $2.1 billion in total);
- States that reach their third tranche would still have access to a pool of funds for very small businesses (about $170 million) and for businesses owned by “socially- and economically-disadvantaged individuals” (about $510 million plus additional incentive funds);
- The pool of technical assistance funding available to businesses through the program would be reduced from $500 million to $300 million; and
- States would be able to increase the administrative cost rate to five percent across all three tranches, addressing an anticipated operational concern many states have raised during the 12 months awaiting access to first tranche of SSBCI funds.
