WASHINGTON — The Biden administration announced Tuesday that an additional 11 states will receive up to $1 billion to support small businesses and entrepreneurs.
Funding for the programs will come from the State Small Business Credit Initiative that Democrats reauthorized and expanded in their $1.9 trillion COVID-19 relief package, known as the American Rescue Plan.
The new tranche of funding will go to Alaska, Idaho, Iowa, Massachusetts, Minnesota, Missouri, Nebraska, Nevada, New Mexico, Ohio and Utah.
“We know that even when we completely control for credit worthiness, small business owners of color, women, face unfair loan denials and higher interest rates,” Gene Sperling, senior adviser to the president and American Rescue Plan coordinator, said during a briefing with reporters.
“We know that too much venture capital goes to just a few cities and parts of our country,” he added. “And the SSBCI, the State Small Business Credit Initiative, is designed to ensure that … capital is flowing everywhere and that it’s going to those who have the best ideas, the best plans for their community, the best job growth.”
How the federal funding will be spent across 11 U.S. states
About $65.6 million of the federal funding was approved for Idaho, according to the U.S. Treasury Department. The money will fund operation of two programs: a collateral support program and a loan participation program.
The loan program, which will receive $26 million, “will originate companion loans used to help fill the gap needed to secure senior loans from banks, institutional lenders and credit unions,” according to the department. The program will support 346 loans, generate approximately $67 million in private financing and create or retain 497 jobs, the department said.
The collateral support program, which will receive about $39 million, will expand access to capital for underserved communities by working closely with established lenders and a CDFI that is established in underserved communities and small businesses in Idaho, according to the department.
In Alaska, up to $59.9 million in federal money will boost lending to commercial fishing, mariculture, manufacturing and tourism, according to a statement from the U.S. Treasury Department.
“The impact of Alaska’s programs is expected to be greatest in rural and remote communities that have struggled to attract capital in commercial fishing and mariculture, manufacturing, and tourism sectors with high upfront capital costs,” according to the summary.
Minnesota Democratic U.S. Sen. Amy Klobuchar, whose state would receive up to $97 million, said during the call that funding would go toward “early stage investments in key sectors like information technology, software, ag, clean technology, manufacturing and more.”
In Nevada, five different programs will get up to $112.9 million for loan and venture capital programs. The funding is expected to lead to more than 2,000 jobs and to capital improvements for energy and water efficiency at commercial properties.
“That’s something that really makes a difference here in the desert — we’re the hottest, we’re the driest, we’re the sunniest state, so that will certainly be helpful,” Rep. Dina Titus, a Nevada Democrat on the press call, said of the investments in energy and water efficiency.
Jacob Leibenluft, U.S. Treasury chief recovery officer, said that federal officials are directing the funding toward small businesses that have traditionally had a harder time accessing capital.
“We know that during the peak of the pandemic, the small businesses who too often have been shut out of the financial system historically, including minority-owned small businesses, are often hit the hardest,” Leibenluft said. “And that’s why we intentionally designed the program to drive investments to underserved entrepreneurs.”
Tuesday’s announcement of an additional $1 billion in federal dollars for 11 states brings the total amount of money approved for the program to $4.8 billion for 31 states.
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