Treasury approves four more SSBCI 2.0 plans, Tennessee still waiting
The wait continues in Tennessee for approval by the U.S. Department of the Treasury of the plan to spend the $117 million that the Volunteer State is allocated under the under the State Small Business Credit Initiative (SSBCI 2.0).
With an announcement very early Friday morning, Treasury has now approved 18 state plans. Joining the list are Colorado, Montana, New York and Montana. Previously announced approvals Arizona, Connecticut, Hawaii, Indiana, Kansas, Maine, Maryland, Michigan, New Hampshire, Pennsylvania, South Carolina, South Dakota, Vermont and West Virginia.
The Tennessee proposal that was submitted by the Tennessee Department of Economic and Community Development proposes three allocations under the “BuildTN” banner. The largest amount is $40 million to the “BuildTN Tech Fund” followed by nearly $29 million to the “BuildTN Regional Seed Program” and $2 million to the “BuildTN Multi-Fund Program.”
Here’s a summary of how the latest approved states plan to use their funds:
- Colorado, approved for up to $104.7 million, will operate three programs, including a venture capital program, to which it has allocated nearly $60 million. The program expects to invest in two venture capital funds per year for three years to build a diverse seed-stage portfolio of small businesses in need of capital. Colorado has also allocated $35 million to an existing cash collateral support program that enables small businesses and non-profit organizations to secure credit by pledging a cash deposit as collateral. In addition, Colorado has set aside $10 million for a loan program intended to help Main Street businesses recover from the pandemic.
- Montana, approved for up to $61.3 million, will operate a loan participation program modeled after a successful program in the previous iteration of SSBCI. This new program is designed to significantly increase the number of eligible CDFI and non-profit local economic development agencies with revolving loan funds (RLFs) that can participate in the program, to obtain a much broader outreach for targeting underserved markets. In addition, this program gives rural and Native American entrepreneurs greater opportunity to create new businesses and expand existing small businesses — creating jobs and economic opportunities in Montana’s rural counties and Indian Country.
- New York, approved for up to $501.5 million, will operate multiple programs, including a capital access program, loan guarantee programs, loan participation programs, and venture capital programs. For example, New York has allocated over $154 million to a program that provide equity support to small businesses by investing through private venture capital funds and accelerator funds. This program will provide capital support to funds with diverse and emerging fund managers and teams. In addition, New York has allocated funds to two programs designed to help small and underserved businesses compete for government contracts, which may include projects funded by the Bipartisan Infrastructure Law. As part of these efforts, New York will expand an existing program that saw a significant majority of its support for potential contractors going to minority- and women-owned businesses.
- Oregon, approved for up to $83.5 million, will operate five programs, including two venture capital programs to which the state has allocated $30 million. The venture capital programs are designed to invest in funds in need of additional capital to launch and scale and to make co-investments in companies alongside private investors by matching the lead investor’s structure and terms. Across its programs, Oregon’s plan aims to counter systemic barriers to economic opportunity by providing access to capital in persistently underserved, low- and moderate-income areas and rural communities. Oregon expects these programs to be self-sustaining, providing vital support to small business in Oregon now and over the long term.
