Maryland was the first state to submit a State Small Business Credit Initiative (SSBCI) deployment plan to the United States Treasury Department, and was one of the first five states to be approved.
Maryland will allocate up to $198 million in federal small business relief through the State Small Business Credit Initiative (SSBCI). That federal initiative was established by Congress in 2010 to provide loans and investments to underserved small businesses. The SSBCI received a $10 billion allocation as part of the American Rescue Plan Act (ARPA) to help the country recover from the COVID-19 pandemic.
Maryland’s SSBCI funds will be administered by three state agencies: the Maryland Department of Housing and Community Development (DHCD), the Maryland Department of Commerce, and the Maryland Technology Development Corporation (TEDCO).
According to a state press release:
The funds from SSBCI will be used to augment existing business lending programs to support businesses with limited opportunities for growth whether due to the pandemic or historic disinvestment. Maryland’s statewide SSBCI initiatives will target communities and areas with a high concentration of small, micro, and Socially and Economically Disadvantaged Individual (SEDI) businesses to support ongoing state investments in underserved communities.
Of the up to $198 million, DHCD will receive the bulk, up to $103 million, and will disburse the funds through the Neighborhood BusinessWorks program. That program provides financing to new and expanding small businesses impacting and operating within the state’s designated “Opportunity Zones,” “Priority Funding Areas,” and “Sustainable Communities and Community Development Financing Institution (CDFI) Investment Areas.”
Additionally, TEDCO will receive up to $50 million to distribute into four existing programs in the state that target technology-based Maryland businesses and entrepreneurs. Three of those programs — the Venture Equity Fund, Venture Capital Limited Partnership Equity program, and Seeds Funds Equity program — primarily distribute venture capital and seed/startup funding, while fourth — the Social Impact Fund — provides investment and support to entrepreneurs who demonstrate economic or social disadvantage.
Lastly, the Department of Commerce will receive up to $45 million for the Maryland Small Business Development Financing Authority (MSBDFA) program. That program enhances the viability and expansion of Socially and Economically Disadvantaged Individual-led businesses and is available to small businesses that are “unable to obtain adequate business financing on reasonable terms,” such as minority and women-owned businesses.
The state expects to start deploying SSBCI resources this summer.