The US Treasury’s State Small Business Loan Initiative increases access to capital for small business owners, covering more than 80% of loans.
California is about to launch a new program designed to create a more inclusive capital ecosystem.
SACRAMENTO – Today, Governor Gavin Newsom announced $1.1 billion in funding to support California’s small businesses. The funding comes from the US Treasury’s State Small Business Credit Initiative (SSBCI), which is intended to provide an additional $18 billion in capital to California’s small businesses.
“California is home to the largest and most diverse small business community in the country,” said Governor Newsom. “We’re a state driven by small business innovation and entrepreneurship — that’s why we’ve invested billions of dollars to help our businesses recover from the pandemic and help more Californians pursue the California Dream. Thanks to this funding, underrepresented and underserved business owners will have more access to the critical funding they need to succeed and thrive.
As of 2011 As part of the 2021 federal rescue plan, California will receive $1.1 billion to support small businesses. The Infrastructure and Economic Development Bank of California (IBank) and the California Pollution Control Finance Authority will split allocations equally to fund small business credit support programs – iBank is launching a new program designed to create a more equitable venture capital ecosystem.
This is the second time states have been able to apply for this federal program. The first In 2010, California requested and received $168 million to run three state credit assistance programs – the Small Business Loan Guarantee Program, the Guarantee Assistance Program and the California Capital Access Program (CalCAP) for Small Business.
Small Business Loan Guarantee Program
In the year As of 2010, iBank will use large SSBCI funds for its Small Business Loan Guarantee Program, working with non-profit organizations and lenders to guarantee small business loans. The guarantees can pay lenders up to 80% of a small business loan if a small business defaults. By providing loan guarantees, iBank gives lenders the confidence they need to lend to small businesses struggling to access capital.
Encouraging creditors to register
To quickly deploy funds and serve small businesses, iBank requires lenders — including community development finance institutions and minority depository institutions — to sign up to use its loan guarantee program. Certification requires only one page form. A list of already participating lenders is available on the IBank Participating Lenders website.
Venture capital program
In addition to small business loan guarantees, IBank will use nearly $200 million of its SSBCI funds to launch its new venture capital program, designed to create an inclusive venture capital ecosystem by investing in underrepresented VC managers, underrepresented and underserved entrepreneurs and business owners. . , and geographic areas that are socioeconomically disadvantaged or receive very limited capital funding. The program promotes climate equity and climate justice.
“IBank is excited to not only continue our successful small business loan guarantee program with new financing, but also to launch this new capital program,” said Scott Wu, CEO of iBank. “Despite California’s dominance in the VC industry, venture capital remains inaccessible to many entrepreneurs. Increasing inclusion of not only who receives VC funding, but also who manages VC funds is critical in the state’s efforts toward equity.
Success in SSBCI first round (2010).
In SSBCI’s first round, California used $168 million to fund more than 10,000 loans, generating more than $1 billion in total financing and creating or retaining more than 90,000 jobs for Californians.
“The California Pollution Control Finance Authority is pleased to partner with iBank for SSBCI 2.0 to bring money to California to support small businesses,” said CPCFA Executive Director Sheila Tobias-Daniels. Together, the CPCFA and iBank programs complement each other to serve different aspects of California’s small business community. We are pleased to work with iBank and the California Office of Small Business Advocacy (CalOSBA) to support many small business lenders and other small business-focused organizations such as chambers of commerce, regional small business development centers and related organizations. Serving Small Business Owners”