The U.S. Department of the Treasury recently announced $86 million for Mississippi under the State Small Business Credit Initiative of the American Rescue Plan.
The Treasury reported more than $8 billion in funding for state, territory and Tribal government plans under the initiative as part of President Joe Biden’s Investing in America initiative, according to a June 28 news release. The projects will assist small businesses and entrepreneurship and increase access to financing.
“Support for small business growth and access to capital is a key component of President Biden’s Investing in America agenda,” Deputy Secretary of the Treasury Wally Adeyemo said in the release. “The State Small Business Credit Initiative is helping to unlock the potential of entrepreneurs in underserved communities in Mississippi and across the nation who may have otherwise never had the support needed to pursue their business ideas and ambitions.”
The State Small Business Credit Initiative was first launched in 2010 and was very effective in boosting access to capital for small firms and entrepreneurs, the release reported. It was renewed and enlarged under the American Rescue Plan.
By giving roughly $10 billion to states, the District of Columbia, territories and Tribal governments, the new State Small Business Credit Initiative expands on this effective model in order to improve access to financing and foster entrepreneurship, particularly in historically neglected regions as they recover from the pandemic. Included in this are financial aid and incentives totaling $2.5 billion for underserved enterprises, according to the release.
For every $1 of State Small Business Credit Initiative capital funding, it is estimated up to $10 in private investment will be catalyzed, magnifying the effects of this funding and giving small business owners the tools they need for long term expansion and success, the release said.
Mississippi will run four programs which include a loan participation program, a loan guarantee program and two equity/venture capital programs, with funding of up to $86 million allowed, the release reported. The Mississippi CDFI Small Business Loan Fund is a loan participation program that would give a loan to CDFIs to encourage lending to Mississippi small businesses. The fund received an allocation of $45 million from the state of Mississippi.
Mississippi also allocated $11 million to a program that will directly invest in startups, especially those in the manufacturing and supply chain sectors, according to the release. Also allocated was $15 million to the Mississippi Venture Capital Program, which is a program that will provide equity support to small businesses by investing in venture capital funds that support startups.
The state will run a $15 million loan guarantee program with a goal of increasing access to finance for underserved small enterprises, as well, the release reported. This program will offer guarantees of up to 80%.
