Janet Yellen Secretary of the Treasury | Twitter Website
The U.S. Department of the Treasury has announced the approval of Alabama’s state plan for up to $97 million in funding through the American Rescue Plan Act’s State Small Business Credit Initiative (SSBCI). The initiative provides financial support to states, the District of Columbia, territories, and Tribal governments to bolster small businesses and entrepreneurship by expanding access to capital.
“Expanding access to capital is key to continuing the historic small business boom that’s occurred under President Biden,” said U.S. Deputy Secretary of the Treasury Wally Adeyemo. “We are helping entrepreneurs across the country unlock access and opportunity, and we’re excited to expand this work to include Alabama’s small businesses – providing collateral, supporting venture capital programs, and reaching communities in need of investment.”
Reauthorized and expanded by President Biden’s American Rescue Plan, SSBCI includes nearly $10 billion aimed at promoting small business stability, growth, and success across various U.S. communities. It enables jurisdictions to create tailored programs offering funding through equity/venture capital, loan participation, loan guarantee, collateral support, and capital access programs.
Alabama's approved plan will operate five specific programs: a loan guarantee program, a collateral support program, a loan participation program, and two equity/venture capital programs. Approximately $26.9 million is allocated to the Innovate Alabama Collateral Support Program for creating cash collateral accounts with participating lenders where there is a collateral shortfall. The Innovate Alabama Co-Investment Program will receive $16 million for direct investments in early-stage companies. Additionally, $9 million will go towards the Innovate Alabama Fund-of-Funds Program to provide equity capital support by investing in multiple venture capital funds as a limited partner.
These equity/venture capital programs aim specifically at startups often overlooked by traditional venture capitalists—particularly those led by women and minority entrepreneurs or located in distressed communities within Alabama—as well as underserved businesses targeted by dedicated venture capital funds.
The Treasury Department's efforts through SSBCI's implementation process remain crucial for ensuring that traditionally underserved small businesses benefit from these opportunities created amidst recovery from pandemic-related impacts.
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