The U.S. Department of the Treasury has again extended the deadline for applications for its State Small Business Credit Initiative for Native-owned small businesses.
Treasury previously pushed the initial application December 2021 deadline into February of this year, but then extended the window now to September 1, 2022.
The State Small Business Credit Initiative (SSBCI) will deliver $10 billion to state, territory and tribal governments to disburse through credit programs, including direct loans. The program was initially crated during the Obama Administration and then revived in the 2021 American Rescue Plan Act, which also appropriates a $500 million SSBCI specifically for tribal governments.
The program was originally designed for states to administer, so the new deadline extention gives tribes a better chance to understand some of the complexities that have arisen in extending eligibility to sovereign tribal nations. Which can be geographically challenges as Tribal memebers are sometimes spreadout thorugh different regions.
Pete Upton, chair and interim director of the Native CDFI Network, told Tribal Business News, “It’s a little more complex for Indian Country, but I think that’s the beauty of the Treasury extending the deadline. It gives tribes and CDFIs time to think of all the unique circumstances that will arise.”
Upton believes the deadline extension will increase access to the “unprecedented funding” for credit building in Indian Country. He named the current list of tribes that have shown their intent to apply for funding, which includes more than 400 tribal nations.* He also said that the role Native CDFIs play in building relationships with Native entrepreneurs makes them prime partners to administer the SSBCI program.
| In 2021, Americans applied to start 5.4 million new businesses—more than 20 percent higher than any previous year on record. This boom in new businesses has been inclusive, as a number of studies show that new entrepreneurship rates have increased the most among minorities. Source: Business Formation Statistics |
What are Native community development financial institutions (CDFIs)?
Native CDFIs are engines of opportunity, offering accessible funding for resourceful and resilient communities in Indian Country. They weave partners, funding, and networks together to create lasting prosperity and opportunities shared by all. They serve as lenders with a mission to provide fair, responsible financing to rural, urban, Native, and other communities that mainstream finance doesn’t traditionally reach. CDFIs receive most of their funding from three sources: banks, the federal government, and institutional investors.
CDFIs are structured to deliver responsible and affordable lending to financially disadvantaged communities where traditional banks are focused on generating profits to satisfy their shareholders’ expectations.
Late May the Treasury announced that the first State Small Business Credit Initiative Awards would support underserved entrepreneurs and small business growth in key industries.
A White House report released in early May found that more Americans are starting new businesses than ever before. In 2021, Americans applied to start 5.4 million new businesses – 20 percent more than any other year on record. It also found that small businesses are creating more jobs than ever before, with businesses with fewer than 50 workers creating 1.9 million jobs in the first three quarters of 2021 – the highest rate of small business job creation ever recorded in a single year. **
Here’s a peek at a few of the first recipients under the SSBCI program plan:
Hawaii- $62,021,957 for HI-CAP Loans and HI-CAP Collateral, lending to projects that will diversify Hawaii’s economy and lessen its reliance on tourism.
Kansas- $69,596,847 for the GROWKS Loan Fund, and GROWKS Angel Capital Support Program to expand access to capital for underserved communities. Approximately 40% of businesses will be women-owned and 20% minority-owned.
Maryland– $198,404,958 for Maryland Department of Housing and Community Development (DHCD), Maryland Department of Commerce and Maryland Technology Economic Development Corporation. Maryland anticipates that 70 percent of new loans will be provided to minority-owned businesses and 40 percent to women-owned businesses.