California to receive up to $1.1 billion from U.S. Treasury for small businesses

Bakersfield, Calif. (KBAK/FOX58) — On Wednesday, September 21st, the U.S. Department of the Treasury announced in a press release the approval of California’s application for funding under the State Small Business Credit Initiative (SSBCI) for up to $1.1 billion and reported it to be the largest funding amount that has been approved in the SSBCI program.

According to the release with SSBCI funds, California will operate six programs expected to create jobs, drive key investments in underserved entrepreneurs, and increase small business lending over the long term.

The American Rescue Plan reauthorized and expanded SSBCI, which was originally established in 2010.

And according to the Treasury, the new SSBCI builds on this model by providing nearly $10 billion to states, the District of Columbia, territories, and Tribal governments to increase access to capital and promote entrepreneurship.

The Treasury said that SSBCI funding is expected to catalyze up to $10 of private investment for every $1 of SSBCI capital funding, amplifying the effects of this funding and providing small business owners with the resources they need to sustainably grow and thrive.

State governments submitted plans to Treasury for how they will use their SSBCI allocation to provide funding to small businesses.

In the plan released by the Treasury, California has allocated:

• Over $118 million to a capital access program that will help cover potential losses on small business loans to enhance small business lending.
• Over $390 million to a small business loan guarantee program that is expected to expand access to capital for underserved communities, including by building on existing relationships with lenders that have strong established presences in those communities.
• Over $472 million to a program that will help to provide collateral for small business loans, which is expected to generate over $5 billion in private financing over the next decade.
• $200 million to implement several venture capital strategies intended to provide key investments to small businesses, including through first-time and under-represented fund managers and those with track records of investing in underserved businesses. These venture capital programs are projected to create or retain over 28,000 jobs and generate several billion dollars of private financing over the next decade

According to the U.S. Treasury the California Infrastructure and Economic Development Bank, will administer the state's SSBCI loan guarantee program, and venture capital programs. While the capital access programs and collateral support programs will be administered by the California Pollution Control Financing Authority.

The Secretary of the Treasury Janey L. Yellen said,

I’m excited to see how SSBCI funds will promote equitable economic growth in California and across the country.