Florida’s State Small Business Credit Initiative – What is It and What Do You Need to Know About It?
In the past two years, we have experienced many hardships due to the coronavirus pandemic. In direct response to the pandemic, the American Rescue Plan Act of December 2020 has reauthorized and expanded the State Small Business Credit Initiative (SSBCI) to $10 billion.
What is the SSBCI?
The program was established in 2010 by the Small Business Jobs Act of 2010 to help states address the difficulties that private businesses faced while securing financing during the nation’s economic recovery. It allowed states to design and implement programs to accommodate various business needs. The SSBCI distributed approximately $1.4 billion to support small business financing programs. This leveraged well over $8 billion in private loans and equity investments through five approved programs:
The original SSBCI program continued through 2017 and successfully delivered capital access to struggling businesses.
Now the SSBCI is Back and Better than Ever!
Funding is eligible for all states, U.S. Territories, Washington D.C., and tribal governments, which will help numerous small businesses. The development will also aid socially and economically disadvantaged individuals and small businesses trying to secure loans and investments.
What do Floridians Need to Know?
On February 10, 2022, the Florida Department of Economic Opportunity (DEO) applied for the SSBCI. This application is currently under review. However, states such as Arizona, Connecticut, Indiana, New Hampshire, Pennsylvania, South Carolina, South Dakota, and Vermont have already received plan approval.
The state has proposed several program types and potential funding allocations equating to almost $500 million to Florida alone to aid small businesses and provide unique opportunities to grow.
Any Florida-based small business with 500 employees or less will be eligible for funding, including corporations, partnerships, sole-proprietors, independent contractors, nonprofits, and cooperatives.
The goal is to get funds into the hands of small businesses that traditionally would be unable to obtain financing due to their financial history – or lack of history. The program will also reward investments to startup organizations that have struggled to receive funding. Additionally, it will allocate specific funds to minority-owned businesses or businesses in low-to-moderate income areas.
Do I Need to Do Anything Now?
Florida’s plan has yet to be approved, but you can start preparing. If your business can benefit from a program such as the SSBCI, start researching institutions that receive SSBCI funds and reach out to them. They will need some time to understand your business and determine the best program option for you.
Berman Hopkins will continue to provide updates once additional information is available. For more information and updates, visit the Florida Department of Economic Opportunity’s Website.