SSBCI FAQ

SSBCI FAQ

• What is the State Small Business Credit Initiative?

  The American Rescue Plan Act of 2021 reauthorized the State Small Business Credit Initiative (SSBCI) as part of the national response to the coronavirus pandemic-induced recession. Originally created in 2010 and federally administered through the United States Department of the Treasury (U.S. Treasury), SSBCI allocates $10 billion in funding to states to use for their own capital access initiatives. Florida has been allocated $488,486,572 to utilize for various technical assistance, capital access, credit support, and venture capital programs designed to help small businesses grow and thrive.

  Florida’s SSBCI program will provide businesses with additional resources and capital to facilitate business growth and economic development. These funds will support businesses owned or controlled by socially and economically disadvantaged individuals, including minority-owned, women-owned, rural, or other targeted small business populations across the state.

  This multi-year effort aligns with the Governor’s prioritization of workforce development initiatives, a business-friendly environment, and aggressive economic growth. In order to maximize the effectiveness of these programs and to meet the needs of small businesses in Florida, we have prioritized stakeholder engagement to ensure this program supports the small businesses that keep our economy strong.

• How much has Florida been allocated for SSBCI?

  Florida has been allocated $488,486,572 for SSBCI through the American Rescue Plan Act of 2021. For additional information, please refer to the U.S. Treasury SSBCI Preliminary Allocation Table.

• What are the types of assistance available through SSBCI?

  The following programs are allowable under SSBCI Guidelines:

  1. Collateral Support – Enables financing that might otherwise be unavailable due to a collateral shortfall. This credit enhancement uses public resources to encourage private lenders to lend money to businesses by providing a cash deposit as collateral for a business loan or credit facility.

  2. Venture Capital – Targeted investment strategy implemented on an appropriate scale that can attract capable investment managers to support Florida small businesses and create value. DEO will work with Enterprise Florida to secure partnerships with public entities and investment managers.

  3. Loan Participation – Medium to long-term small business financing either in the form of a purchase participation or companion loan where a private lender originates a senior loan and the state originates an equal or subordinate loan to the same borrower.

  4. Loan Guarantee – Provides a private lender with the necessary security (typically a partial guarantee) to approve a loan or line-of-credit for eligible small businesses.

  5. Capital Access – A loan portfolio insurance program (pooled loan insurance) where a private lender originates a loan and the borrower and lender contribute a percentage of the loan per eligible small business, which is then matched by SSBCI funding.

• When will the SSBCI Program be available?

  SSBCI is administered at the federal level by the U.S. Treasury. DEO has submitted an application that details how the state will utilize SSBCI funds to provide access to capital for small businesses and targeted business populations.

  Once U.S. Treasury approves the application, the allocated funds will be disbursed to the State of Florida for the administrations of the State’s SSBCI program. Please continue to visit floridajobs.org/SSBCI for more information.

• Who is eligible for SSBCI funding?

  Any Florida-based small business, or small business that will be located in Florida, with 500 employees or less. This includes corporations, partnerships, sole-proprietors, independent contractors, nonprofits, and cooperatives. Permissible borrowers may include state-designated charitable, religious, or other nonprofit or philanthropic institutions; government-owned corporations; consumer and marketing cooperatives; and faith-based organizations, provided the loan is for a “business purpose.”

  A business purpose includes, but is not limited to: start-up costs, working capital, business procurement, franchise fees, equipment, inventory, and the purchase, construction, renovation, or tenant improvements of an eligible place of business that is not for passive real-estate investment purposes.

  Restrictions apply to refinancing and other uses; please refer to the SSBCI Policy Guidelines for additional details.

• What are Socially and Economically Disadvantaged Individuals (SEDI)?

  As defined by SSBCI, SEDI businesses are businesses owned by individuals who have had access to credit on reasonable terms diminished as it compares to others in comparable economic circumstances based on the following criteria:

  • (1) Membership of a group that has been subjected to racial or ethnic prejudice or cultural bias within American society;

  • (2) Gender;

  • (3) Veteran status;

  • (4) Limited English proficiency;

  • (5) Physical handicap;

  • (6) Long-term residence in an environment isolated from the mainstream of American society;

  • (7) Membership of a federally or state-recognized Indian Tribe;

  • (8) Long-term residence in a rural community;

  • (9) Residence in a U.S. territory;

  • (10) Residence in a community undergoing economic transitions (including communities impacted by the shift towards a net-zero economy or deindustrialization); or

  • (11) Membership of another “underserved community” as defined in Executive Order 13985

  Additionally, the following conditions qualify as SEDI businesses:

  • Business enterprises that certify they are owned and controlled by individuals whose residences are in Community Development Financial Institution (CDFI) Investment Areas (see FAQ below);

  • Business enterprises that certify that they will operate a location in a CDFI Investment Area;

  • Business enterprises that are located in a CDFI Investment Area.

• What is a Community Development Financial Institution (CDFI) Investment Area?

  CDFI Investment Areas are generally low-income, high-poverty areas that receive neither sufficient access to capital nor support for the needs of small businesses, including minority-owned businesses.

  Each SSBCI transaction, whether the relevant location is in a CDFI Investment Area or not, must be determined immediately before the closing of the relevant loan, investment, or other credit or equity support-related transaction, at the time that ownership and control is assessed. See the CDFI Public Viewer for a map of CDFI Investment Areas for the purposes of SSBCI.

• What are Very Small Businesses?

  As defined by SSBCI, a Very Small Business has fewer than 10 employees, including independent contractors and sole proprietors, at the time of the loan, investment, or other/equity support.

• How does a lender become enrolled in the SSBCI Program(s)?

  DEO will target institutions in the financial services sector that align with the mission of SSBCI. Community banks and nonprofit mission-based lenders, particularly CDFIs, are important to reach this program’s intended populations and will be utilized to the greatest extent possible. DEO will exercise due care to ensure that each financial institution participating in SSBCI possesses sufficient commercial lending experience, financial and managerial capacity, and operational skills to meet the objectives of SSBCI. Under SSBCI, any insured depository institution, insured credit union, certified development company, or community development financial institution, as defined in section 103 of the Riegle Community Development and Regulatory Improvement Act of 1994, is eligible to participate. Additional eligible lenders must meet the definition of the term “Financial Institution” as defined in Section 655.005, Florida Statutes.

  If you are an investor, bank, credit union, or CDFI and are interested in learning more about SSBCI, please contact the Florida Department of Economic Opportunity at SSBCI@DEO.MyFlorida.com and a representative will reach out.