State Small Business Credit Initiative (SSBCI)
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State Small Business Credit Initiative (SSBCI)

SSBCI is a $10 billion federal program that helps states support small businesses and startups that are creditworthy but unable to access the capital they need to grow or establish their businesses and create jobs.


To share your experience or feedback with LED, click here to access a survey for small businesses.


The first SSBCI was established in 2010. The American Rescue Plan Act of 2021 reauthorized and expanded SSBCI to increase access to capital and promote entrepreneurship, especially in traditionally underserved communities as they emerge from the pandemic. U.S. Treasury guidelines ensure that very small businesses with fewer than 10 employees (VSBs) and small businesses owned by socially and economically disadvantaged individuals (SEDIs) will receive critical resources to sustainably grow and thrive.

Louisiana received official U.S. Treasury approval for up to $113 million in SSBCI funds on Dec. 6, 2022. (Read the LED news release here.) Access to the full $113 million is dependent on state disbursements meeting federal funding benchmarks for VSBs and SEDIs whose access to capital is a point of emphasis.

LED, via the Louisiana Economic Development Corporation (LEDC), will work with private equity funds and financial institutions to disburse SSBCI funds via collateral support, equity, micro lending and loan guaranty programs.

A high-level description of each program and its potential financial benefits can be found by clicking the “Programs” dropdown below. Use the directory at left (on a desktop computer) or below (on a mobile device) to access additional detail about eligibility requirements, program rules, application process, participating providers and frequently asked questions about the various programs.

Like the first SSBCI, which concluded in 2017, the American Rescue Plan Act of 2021 authorizes the new initiative for seven years. Approval of Louisiana’s allocation is an important but early step. The process of qualifying and opting in as a participating provider will be ongoing over a period of several months; the same is true of application processes, which vary by program, fund and lender, and are likely to evolve over time.

LED will post all of the latest developments about the program – including updated fund and lender names and contact info as new providers opt into SSBCI program – on this website.

LED continues to work diligently to finalize an SSBCI application process that serves the needs of participating equity funds and lenders while also complying with all U.S. Treasury guidelines. That work will continue into the first quarter of 2023. When the process is complete and the Louisiana SSBCI is officially rolled out, small business owners and entrepreneurs may begin applying for funds through approved providers in the programs described below.


Programs

Program Type  Description  Details / Benefits
Micro Lending (MLP) Establishes a revolving loan fund with Louisiana Community Development Financial Institutions (CDFIs) and other qualifying lenders, to provide access to capital to very small businesses with either start-up or expansion business needs.

Smaller financing needs: $1,000 - $100,000 

Collateral Support (CSP)

Establishes pledged cash collateral accounts with participating institutions to enhance loan collateral for those businesses where a collateral shortfall exists. 

 

Up to $250,000 cash collateral support, $1 million max loan

 

Small Business Loan Guaranty (SBLG)

Provides a loan guaranty to banks and other small business lenders on the loans to Louisiana-based small businesses to help with their business development or expansion needs.

Up to 80% or $1.5 million max guaranty

 

Seed Capital

Funds placed with a venture capital fund to assist in the support of private financing through investments to create and grow start-up and early stage businesses. 

1:1 Match, max $5 million/fund

 

Venture Capital

 Funds within a venture capital fund to assist in the support of private financing through investments for the expansion of small businesses. 4:1 Match on for-profits, max $10 million/fund

2:1 Match on nonprofits, max $10 million/fund

 


FAQS

Q: Has LED awarded SSBCI funds to the approved equity firms and other participating financial institutions?
A:
 Not at this time. SSBCI equity fund participants have been approved by the LEDC Board and participation agreements are in process.

Q: Who should entrepreneurs contact first if they want to apply?
A: 
The entrepreneur should contact a participating equity fund or lending institution. If they are unsure of those participating, they can access the most up-to-date list on this website, accessible at LouisianaSSBCI.com. Guidance is also available at Louisiana’s . The fund or lender will ensure the applicant completes SSBCI application documentation, as per the program rules.

Q: Why doesn’t SSBCI remove the middleman and allow applications to LED directly?
A: 
SSBCI is not a government grant program that allows LED to provide funds directly to businesses. SSBCI is an economic stimulus program that uses federal dollars to leverage private investment in existing and start-up businesses. LED is a bridge or conduit between the U.S. Treasury, financial institutions and the entrepreneurs and small businesses they serve.

Q: When can business owners and investors begin applying for SSBCI support?
A: 
Development of the Louisiana SSBCI application process, which includes U.S. Treasury and legal requirements, is underway and will continue into the first quarter of 2023. Conditioned upon having a fully qualified financial institution and eligible entrepreneur, funds should be flowing in April. Please note that because the application process originates in the private sector, prospective applicants and participating fund managers or lenders may begin exploratory discussions about potential SSBCI funded projects at any time.