Louisiana Awarded Up to $113 Million by U.S. Treasury To Support Small Business Growth in the State

Louisiana - The Louisiana Office of the Governor announced on Tuesday, December 6, 2022, that the US Treasury has approved Louisiana's application for up to $113 million in federal funding for small business owners and entrepreneurs as part of the $10 billion State Small Business Credit Initiative (SSBCI).

SSBCI was founded in 2010 as a method for the federal government to assist states in assisting small businesses that were creditworthy but unable to get the finance needed to develop and generate jobs. The American Rescue Plan Act of 2021 reauthorized and expanded SSBCI to encourage entrepreneurship, particularly in historically marginalized neighborhoods emerging from the pandemic.

“This award of up to $113 million is significant news for our entrepreneurs and small business owners in Louisiana, especially in communities that have historically struggled to attract business capital and investment,” Gov. John Bel Edwards said. “Small businesses have long been the backbone of our economy in Louisiana, and they bore some of the most challenging economic burdens since the onset of the COVID-19 pandemic. This program will put substantial federal funding into capital programs for small businesses and entrepreneurs most in need of support in our state.”

When the Treasury Department announced SSBCI application instructions to the 50 states in November of last year, Governor Edwards authorized Louisiana Economic Development to manage the program through the Louisiana Economic Development Corporation (LEDC). LED will distribute SSBCI monies through Louisiana's five small business support programs in collaboration with partner equity funds and financial institutions:

• Venture Capital (LVCP) and Seed Capital (LSCP), which provide equity support for small businesses by investing as a limited partner to create and grow start-up businesses.
• Micro Lending (MLP), which establishes a revolving loan fund with qualifying lenders to assist very small businesses with start-up or expansion financing needs.
• Collateral Support (CSP) and Small Business Loan Guaranty (SBLGP) programs, which establish pledged collateral accounts where a shortfall may exist, or provide a state guarantee to reduce risk for business development or expansion financing.

Louisiana's share is approximately nine times greater than the $13.2 million it received in the previous program in 2010. The majority of the $113 million, up to $91.5 million, is earmarked for venture capital and seed programs. The full amount is contingent on meeting government funding goals for very small businesses (VSBs) and socially and economically disadvantaged individuals (SEDIs) whose access to financing has previously been limited.

The state intends to get federal monies into the hands of Louisiana company owners and entrepreneurs as quickly as possible by working through established LED programs whose rules were developed earlier this year to conform with SSBCI criteria.

The American Rescue Plan Act of 2021, like the original round of SSBCI, has authorized the current effort for seven additional years. The approval of Louisiana's allocation is a critical but preliminary step. Qualifying and opting in as a participating provider will take several months, as will application processes, which vary by program, fund, and lender and may evolve over time.

All of the most recent program updates, including eligibility requirements, rules, application FAQs, and provider contact information, may be found by following this link.