Last week, the U.S. Department of the Treasury announced the approval of California’s application for funding under the State Small Business Credit Initiative. The state will receive up to $1.1 billion, the largest funding amount that has been approved in the SSBCI program.
“This is a historic investment in entrepreneurship, small business growth, and innovation through the American Rescue Plan that will help reduce barriers to capital access for traditionally underserved communities,” said Treasury Secretary Janet L. Yellen. “I’m excited to see how SSBCI funds will promote equitable economic growth in California and across the country.”
With its SSBCI funds, California will operate six programs expected to create jobs, drive key investments in underserved entrepreneurs, and increase small-business lending. California has allocated more than $118 million to a capital access program that will help cover potential losses on small-business loans to enhance lending and more than $390 million to a loan guarantee program. More than $472 million will go to a program that will help to provide collateral for small-business loans, and $200 million will be used to implement several venture capital strategies.
These venture capital programs are projected to create or retain more than 28,000 jobs and generate several billion dollars of private financing over the next decade.
“Small businesses are the backbone of our economy, and I am proud the American Rescue Plan is delivering historic investments to help entrepreneurs thrive, particularly in underserved areas,” said California Rep. Mike Levin.
The California Infrastructure and Economic Development Bank, an agency of the Governor’s Office of Business and Economic Development, will administer the state’s SSBCI loan-guarantee program and venture capital programs, and the California Pollution Control Financing Authority, an authority of the State Treasurer’s Office, will administer the capital access program and the collateral support program.
