In an effort to connect more small business owners to the capital they need, Rhode Island is set to receive up to $61.7 million in federal funding to promote small business growth and entrepreneurship in the Ocean State, thanks to legislation supported and passed by U.S. Senators Jack Reed and Sheldon Whitehouse and Congressman David Cicilline.
Reed, Whitehouse, and Cicilline lauded U.S. Treasury’s approval of Rhode Island’s application to receive State Small Business Credit Initiative (SSBCI) funds in the latest round of funding. Reed and Whitehouse voted to set up the original SSBCI program in 2010 and they, along with Congressman Cicilline, helped reauthorize it and deliver a $10 billion pool in SSBCI funding as part of the American Rescue Plan Act, which was signed into law by President Biden on March 11, 2021.
The federal SSBCI funding will help small businesses access the capital they need to grow and create jobs.
SSBCI investment programs require a ratio of 10 dollars of private capital investment for every dollar of federal funding invested.
“This new injection of federal funds will help small business owners and entrepreneurs access the capital they need to grow their businesses. It offers seed funding to turn promising business ideas into action, jobs, and opportunities,” said Senator Reed. “This new pool of small business financing can be leveraged to connect small businesses to additional private capital investment. It will have a positive impact on economic development, helping Main Street businesses, neighborhoods, and communities that need it most.”
“We helped secure this federal funding to foster Rhode Island’s entrepreneurial spirit and improve access to start-up capital,” said Senator Whitehouse. “This investment will empower our small business community to create jobs and grow the economy in a way that brings underserved communities along.”
“Small businesses are the backbone of Rhode Island’s economy. This federal funding will help our entrepreneurs, family-run businesses, and small firms – especially those that have been historically underserved – access new resources and supports,” said Congressman Cicilline. “The initiative will help equitably strengthen the state’s economy and support hardworking Rhode Islanders. I look forward to seeing these investments make their way into our communities and neighborhood businesses.”
SSBCI was first created under President Obama as part of the Small Business Jobs Act, which became law on September 27, 2010. Under the program, the Treasury Department allocated $1.5 billion to fund state programs across the country that support small businesses, including small manufacturers.
As a result of that law, over $13 million in SSBCI funds were made available to Rhode Island to support businesses and the local economy. Rhode Island used the first SSBCI funding wave years ago to leverage $15 in outside financing for each $1 in SSBCI funds invested; providing nearly 90 loans/investments to small businesses; with a median principal loan/investment of $70,545.
Under the law, each state designs its own small business programs, and Rhode Island has implemented credit and equity initiatives to fund small business credit expansion activities in the state.
The state will be responsible for allocating the federal funds and plans to target SSBCI funds to help underserved businesses and entrepreneurs across Rhode Island. The state will use its SSBCI funds to deliver loans to underserved small businesses and will partner with proven private entities to identify and boost local early-stage and high-growth firms.
The Rhode Island Commerce Corporation has hired the Council of Development Finance Agencies, which works with state governments and municipalities, and Cromwell Schmisseuer, a venture capital firm, to advise the state on program implementation. It has published a request for proposal (RFP) to identify partners and launch SSBCI-funded programs later in 2023 and beyond.
For more information on SSBCI and Treasury’s other small business programs, please visit: https://home.treasury.gov/policy-issues/small-business-programs/state-small-business-credit-initiative-ssbci
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