Over $230M approved for Virginia through Small Business Credit Initiative

WASHINGTON D.C. (WSET) — On Tuesday, the U.S. Department of the Treasury announced the approval of Virginia’s state plan for funding under the State Small Business Credit Initiative (SSBCI). Virginia, approved for up to $230.4 million, will operate five programs: two loan participation, one loan guarantee, and two equity/venture capital programs.

The loan programs will consist of $57 million to be deployed to eligible small businesses. The equity/venture capital programs have combined allocations of over $173.4 million. The direct program will provide equity co-investments to private capital invested in seed and early-stage technology companies and the funds program will provide limited partner investment commitments to Virginia-based venture capital firms raising new funds and will stimulate private capital investment in new Virginia-based funds investing in entrepreneurs from underserved communities in the state.

“Start-ups and small businesses are critical to our future and job creation. This initiative will expand our existing funding programs for companies with high potential for rapid growth and significant economic development,” said Governor Glenn Youngkin. “We must have an economy that encourages innovation and entrepreneurship across the Commonwealth because new businesses create opportunities that lift up all Virginians.”

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“This is a historic investment in entrepreneurship, small business growth, and innovation through the American Rescue Plan that will help reduce barriers to capital access for traditionally underserved communities,” said Secretary of the Treasury Janet L. Yellen. “These SSBCI funds will promote equitable economic growth across the country.”

“Small businesses are the backbone of local economies throughout Virginia. But finding access to the capital it takes to get a business off the ground can be challenging, especially for minority- and women-owned businesses who are often underserved in existing markets,” said Senator Tim Kaine, who grew up pitching in to help his family’s small ironworking business. “That’s why we made sure the American Rescue Plan included these funds, so we can help the next generation of entrepreneurs innovate, start and grow new businesses, and create more jobs.”

The American Rescue Plan reauthorized and expanded SSBCI, which was originally established in 2010 and was highly successful in increasing access to capital for small businesses and entrepreneurs. The new SSBCI builds on this successful model by providing nearly $10 billion to states, the District of Columbia, territories, and Tribal governments to increase access to capital and promote entrepreneurship, especially in traditionally underserved communities as they emerge from the pandemic.

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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.

A White House report found that more Americans are starting new businesses than ever before. In 2021, Americans applied to start 5.4 million new businesses – 20% more than any other year on record.

According to the report, small businesses with fewer than 50 workers created 2.8 million jobs in 2021 – the highest rate of small business job creation ever recorded in a single year. The investments being made through SSBCI are a key part of the Biden Administration’s strategy to keep this small business boom going by expanding access to capital and by providing entrepreneurs with the resources they need to succeed.

The work Treasury has done through the implementation process to ensure SSBCI funds reach traditionally underserved small businesses and entrepreneurs will also be critical to ensuring the small business boom continues to lift up communities disproportionately impacted by the pandemic. The Treasury said it intends to continue approving state plans on a rolling basis.