Governor plans to deploy $198 million in state for small business relief
Gov. Larry Hogan (R) recently announced that the state will deploy up to $198 million in federal small business relief through the State Small Business Credit Initiative.
Maryland was the first state in the nation to submit its SSBCI deployment plan to the United States Treasury Department, and today was one of the first five states to be approved, according to a release sent May 19.
“Through a number of relief programs, our efforts to keep Maryland ‘open for business’ during the pandemic have protected jobs and empowered one of the strongest and sustainable recoveries in the nation,” Hogan said. “We have one of the most aggressive plans in the country to get these resources out the door utilizing our very successful lending and investment programs to help our small businesses, particularly those in underserved communities primed for revitalization.”
Initially established by Congress in 2010 to provide loans and investments to underserved small businesses, SSBCI received a $10 billion allocation as part of the American Rescue Plan Act. The SSBCI funds will be administered by three state agencies, including the Maryland Department of Housing and Community Development, the Maryland Department of Commerce, and the Maryland Technology Development Corporation.
The funds from SSBCI will be used to augment existing business lending programs to 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 businesses to support ongoing state investments in underserved communities.
The housing department will receive up to $103 million and disburse the funds through the Neighborhood BusinessWorks program. 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 Investment Areas, often through partnerships with local and national investment areas.
“Neighborhood BusinessWorks has long been our department’s flagship business lending program with established infrastructure, processes, and partnerships that have provided more than $70 million in capital to businesses under Governor Hogan’s leadership,” DHCD Secretary Kenneth C. Holt said. “This additional federal funding will enable this already successful program to significantly expand its reach and impact in both urban and rural Maryland.”
The Maryland Department of Commerce will receive up to $45 million for the Maryland Small Business Development Financing Authority program. Created in 1978 to promote the viability and expansion of Socially and Economically Disadvantaged Individual-led businesses, the financing authority program 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.
“For more than 40 years, MSBDFA has helped thousands of small businesses in Maryland reach their full potential, and we are very pleased that an additional $45 million will be allocated to this important program,” said Maryland Commerce Secretary Mike Gill. “These funds will provide a much-needed lifeline for many small businesses and help our state continue its economic recovery.”
TEDCO will receive 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.
“We want to express our thanks to our friends at DHCD for their leadership on getting us to this point,” said TEDCO CEO Troy LeMaile-Stovall. “And this point is about investing in individuals and communities that are underrepresented in our innovation ecosystem, while also creating additional funds for TEDCO to invest in firms that will start and scale in Maryland – generating a more equitable future.”
The state of Maryland expects to begin deploying State Small Business Credit Initiative resources through these programs in the summer of 2022. Business owners and lending institutions wishing to apply for financing should visit open.maryland.gov/ ssbci to submit an expression of interest form to be notified when funds become available.