The U.S. Department of the Treasury has released a report detailing the impact of the State Small Business Credit Initiative (SSBCI) over its first two years. The program, reauthorized and expanded under the American Rescue Plan, aims to provide nearly $10 billion to support small businesses across the United States.
According to the report, from August 5, 2022, through December 31, 2023, SSBCI reached over 3,600 small businesses through nearly 3,900 loan and investment transactions. These efforts are projected to create or retain more than 46,200 jobs. "Small businesses and hard-working entrepreneurs are at the core of the American economy," stated U.S. Deputy Secretary of the Treasury Wally Adeyemo.
The report highlights that jurisdictions have used approximately $750 million in SSBCI funding to generate $3.1 billion in new financing for small businesses. This includes $2.6 billion from private sources. The initiative supports various sectors including transportation and warehousing; professional services; accommodation and food services; manufacturing; and retail trade.
Since President Biden took office, there have been historic levels of new small business applications attributed partly to federal investments in small business growth. The SSBCI program provides funds to states and territories allowing them to address local market challenges.
The report also emphasizes support for underserved communities with minority-owned businesses receiving significant backing. Specifically, 40% of transactions supported minority-owned enterprises with Black and Asian-owned businesses each accounting for around 14% of these transactions.
Furthermore, partnerships with community banks play a crucial role in SSBCI's success. Over half of participating lenders were community banks or Community Development Financial Institutions (CDFIs). Venture capital programs have also seen strong beginnings with jurisdictions investing $211 million matched by private investments resulting in $1.2 billion in new financing.
Examples of businesses benefiting from SSBCI include Global Retool Group America in Michigan receiving working capital credit; Salmon River Outpost near California’s Hoopa Valley Reservation obtaining a loan; and Cap Creations in Kansas securing venture angel investment.
Treasury has approved plans for small business financing programs totaling over $8.9 billion covering all states and territories along with several Tribal governments.