Fill in the blank: It takes a village to ______.
Your first thought may be raising children but we’d like to suggest that it applies to your small business as well — particularly during inflationary times. The 2020 world made it painfully obvious that going at it alone could mean crashes and burns.
Hence the creation of PPP loans and ERC credits — government-supplied village helpers made for you. Just because those have expired and your business is having to stand more on its own feet, doesn’t mean there aren’t still helpers out there. That’s good news with the possibility of a recession hanging in the air.
Programs like the State Small Business Credit Initiative are just one of those village helpers. And we’d like to think we here at TCG Accounting could be one of your village helpers, too. We’re here to help you steer your business into good financial standing and profitability… and keep you tax compliant.
Ready for some help? Give us a call: 218-623-6050.
Now, let’s talk about what the State Small Business Credit Initiative (SSBCI) is and how you can utilize it in your business.
All About the SSBCI for Business Owners
“Play by the rules but be ferocious.” – Phil Knight
Now that a lot of pandemic-related stimulus and finance programs are over, wouldn’t it be nice if your small business had another source of funding to help you through these unusually lean times?
Turns out you might: Hence the State Small Business Credit Initiative (SSBCI) Program.
You may have never heard of it, but it’s been around for more than a decade and was just renewed. Every year states nationwide get hundreds of millions of dollars to pump into companies like yours. Here’s how your business can get involved:
Money coast to coast
The SSBCI was re-funded, and expanded, by the American Rescue Plan Act of 2021. It’s set to give billions to states, the District of Columbia, territories, and Tribal governments. It aims to “expand access to capital for small businesses emerging from the pandemic, build ecosystems of opportunity and entrepreneurship and create high-quality jobs.”
That may be bureaucratese, but it’s also sweet music to small-business owners trying to pull their companies out of the muck of the last few years. Earlier this year, Hawaii, Kansas, Maryland, Michigan, and West Virginia got almost six hundred and forty million dollars combined. More than nine hundred and forty million are now headed to Arizona, Connecticut, Indiana, Maine, New Hampshire, Pennsylvania, South Carolina, South Dakota, and Vermont.
This year’s SSBCI was geared to help states finance businesses with fewer than 10 employees, businesses owned by socially and economically disadvantaged people, and technical assistance.
SSBCI helps jurisdictions do the following:
1.) Set up public-private partnerships for equity investing or invest in venture capital funds
2.) Buy interest in the loans made by lenders or lend directly
3.) Partially guarantee private loans
4.) Fund collateral for new loans and
5.) Partially backstop portfolios.
Where the funds go
Many states funnel the money toward new businesses in underserved areas. Tech areas seem to be a favorite sector, with rural areas a favored locale. The SSBCI (and the states that get the money) wants to level the field between big corporations and Main Street – especially in these days of pandemic recovery, inflation, and supply chain muck-ups. It aims to “catalyze private investments” and promote business development, ideally generating ten bucks in lending and investment for every dollar federally funded through the program. It emphasizes local programs.
Here’s how the latest round of funding will be used in other states:
- Connecticut will have a fund supporting early-stage businesses with a focus on clean energy, environmentally safe manufacturing, and climate resiliency.
- Maine will use part of its funds on sectors important to the state itself, such as forestry and agriculture, sustainable use of ocean resources, and tourism.
- Vermont’s going to address healthcare and climate change, among other areas.
- Michigan (where historically the program targeted industries with high wages and high job growth potentials such as manufacturing, medical device technology, engineering, and agribusiness) looks to expand to smaller service and retail businesses nailed by the pandemic downturn.
How to get your slice
Clearly, if your small business fits certain parameters, you might be able to tap some of this money.
To qualify for financial help through the SSBCI, you have to live or own a business in a state that’s been approved for funds.
States do the applying for this program, but you can visit the SSBCI site to learn more about the eligibility requirements for each state. Check local banks or online financing sources for a lender that’s been green-lighted by the SSBCI. Then, as you would for any business loan, collect financial statements, credit reports, and other key documents and fill out the loan application.
Another route would be to reach out to your state directly. States around the country call their overseeing agencies innovation or venture development corporations. Sometimes they’re economic development groups. Some of the agencies cover specific issues such as housing. Whatever the name, you can find a list of programs in states – and, just as important, the contacts – here.
We’re not saying that getting money will be easy or quick. We are saying that it’s another potential source of funding for your business during some tough times, and we’d be happy to help you tap into it.
Remember, you don’t have to go it alone in your business, and you shouldn’t. Leaning on your village to help your business thrive in every season is just good sense. Our team at TCG Accounting is always here to be one of your trusted helpers.
So, don’t hesitate to reach out if you need some guidance on whether the SSBCI is right for your business: 218-623-6050.
We’re here to help you build something lasting.
In your village,
The TCG Accounting Team