Governor Larry Hogan – Official Website of the Governor of Maryland
Maryland was the first state to submit its Small Business Credit Initiative plan to the US Treasury
Three state agencies to incorporate funds to expand existing business loan and investment programs
Annapolis, MD—Governor Larry Hogan today announced that the State of Maryland will deploy up to $198 million in federal assistance to small businesses through the State Small Business Credit Initiative (SSBCI) . Maryland was the first state in the nation to submit its SSBCI deployment plan to the United States Department of Treasury, and was today one of the first five states to be approved.
“Through a number of relief programs, our efforts to keep Maryland ‘open for business’ during the pandemic have protected jobs and enabled one of the strongest and most enduring recoveries in the country,” Governor Hogan said. . “We have one of the most aggressive plans in the country to bring out these resources by using our highly successful lending and investment programs to help our small businesses, especially those in underserved communities primed for revitalization.”
Originally created by Congress in 2010 to provide loans and investments to underserved small businesses, SSBCI received a $10 billion allocation under the American Rescue Plan Act. The SSBCI funds will be administered by three state agencies, including the Maryland Department of Housing and Community Development (DHCD), the Maryland Department of Commerce, and the Maryland Technology Development Corporation (TEDCO). SSBCI funds will be used to augment existing business lending programs to support companies with limited growth opportunities, whether due to the pandemic or historic divestment. Maryland’s statewide SSBCI initiatives will target communities and areas with high concentrations of small businesses, micro-enterprises, and socially and economically disadvantaged individuals (SEDI) to support the state’s continued investments in underserved communities.
The DHCD 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 that are impacting and operating in Opportunity Zones, Priority Funding Zones and Investment Zones of Sustainable Communities and Community Development Finance Institutions (CDFIs) of Maryland, often through partnerships with local and national CDFIs.
“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,” said the DHCD Secretary, Kenneth C. Holt. “This additional federal funding will allow this already successful program to significantly expand its reach and impact in urban and rural Maryland.”
The Maryland Department of Commerce will receive up to $45 million for the Maryland Small Business Development Financing Authority (MSBDFA) program. Established in 1978 to promote the viability and expansion of businesses run by socially and economically disadvantaged people, MSBDFA is now available to small businesses that are unable to obtain adequate commercial financing on reasonable terms. In particular, the program has become an established resource for supporting the growth of minority and women-owned businesses through a network of government agencies, local economic development organizations, banks and corporations. private equity, as well as many trade associations, chambers of commerce and local professionals.
“For more than 40 years, the MSBDFA has helped thousands of small businesses in Maryland reach their full potential, and we are very pleased to have an additional $45 million allocated to this important program,” said the Maryland Commerce Secretary Mike Gill. “These funds will provide a much-needed lifeline to many small businesses and help our state continue its economic recovery.”
TEDCO will receive up to $50 million and allocate the funds to four existing programs targeting Maryland technology companies and entrepreneurs. Three programs – the Venture Equity Fund, the Venture Capital Limited Partnership Equity Program and the Seeds Funds Equity Program – are primarily focused on venture capital and seed funding. The fourth, the Social Impact Fund, provides investment and support to entrepreneurs who are at an economic or social disadvantage. Through these four programs, TEDCO will continue to leverage its relationships with leading technology companies, entrepreneurs and investors in the state while collaborating with regional universities, accelerators and business incubators and other organizations.
“We would like to express our thanks to our friends at DHCD for their leadership in getting us to this point,” said TEDCO CEO Troy LeMaile-Stovall. “And that point is about investing in individuals and communities that are underrepresented in our innovation ecosystem, while creating additional funds for TEDCO to invest in companies that will start and scale in Maryland – generating a future fairer.”
The State of Maryland plans to begin rolling out SSBCI resources through these programs in the summer of 2022. Business owners and lending institutions interested in applying for funding should visit open.maryland.gov/ssbci to submit an expression of interest form to be notified when funds become available.