Up to $198 million in federal small business relief is being 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).
The Maryland Department of Housing and Community Development (DHCD), the Maryland Department of Commerce, and the Maryland Technology Development Corporation (TEDCO) will use funds to expand and enhance nine existing state business lending and investment programs. The nine programs funded by the State Small Business Credit Initiative (SSBCI) will 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.
According to the Governor’s Office press release, the funds will be used by agencies in the following ways:
Neighborhood BusinessWorks. DHCD will deploy up to $103 million and disburse the funds through three Neighborhood BusinessWorks program initiatives. The program provides financing to new and expanding small businesses impacting and operating within Maryland’s designated Opportunity Zones, Priority Funding Areas, and Sustainable Communities and Community Development Financing Institution (CDFI) Investment Areas. The Neighborhood BusinessWorks Loan to Lender initiative directly supports CDFI revitalization and investment efforts, providing funds for them to re-lend to local small businesses. The Neighborhood BusinessWorks Loan Participation Program assists eligible businesses with working capital and real estate acquisition. The Neighborhood BusinessWorks Venture Loans initiative supports strategic businesses with high potential job growth.
Maryland Small Business Development Financing Authority. The Maryland Department of Commerce will deploy up to $45 million through two Maryland Small Business Development Financing Authority (MSBDFA) programs. Created in 1978 to promote the viability and expansion of Socially and Economically Disadvantaged Individual-led businesses, MSBDFA is now available to small businesses that are unable to obtain adequate business financing on reasonable terms. In particular, the program has become a well-established resource to support the growth of minority and women-owned businesses through a network of government agencies, local economic development organizations, banks, and private equity companies, as well as numerous business associations, chambers of commerce, and local professionals.
TEDCO Programs. TEDCO will deploy up to $50 million and will allocate the funds into four existing programs targeting technology-based Maryland businesses and entrepreneurs. Three programs—the Venture Equity Fund, Venture Capital Limited Partnership Equity program, and Seeds Funds Equity program—are primarily focused on venture capital and startup funding. The fourth, the Social Impact Fund, provides investment and support to entrepreneurs who demonstrate economic or social disadvantage. Through these four programs, TEDCO will continue to leverage its relationships with top-tier technology companies, entrepreneurs, and investors in the state while collaborating with universities, regional business accelerators and incubators, and other organizations.