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11 states to share in $1 billion in funding for small businesses, entrepreneurs

By: - October 11, 2022 3:33 pm

Missouri was approved for up to $94.8 to operate a venture capital program, IDEA Fund, managed by the Missouri Technology Corp. (Scalinger/iStock Getty Images).

WASHINGTON — The Biden administration announced Tuesday that an additional 11 states will receive up to $1 billion to support small businesses and entrepreneurs — including nearly $100 million in Missouri.

Funding for the programs will come from the State Small Business Credit Initiative that Democrats reauthorized and expanded in their $1.9 trillion COVID-19 relief package, known as the American Rescue Plan.

The new tranche of funding will go to Alaska, Idaho, Iowa, Massachusetts, Minnesota, Missouri, Nebraska, Nevada, New Mexico, Ohio and Utah.

Missouri was approved for up to $94.8 to operate a venture capital program, IDEA Fund, managed by the Missouri Technology Corp.

According to the announcement, the program provides equity or equity-like co-investment alongside primarily angel investors or venture capital funds. The IDEA Fund targets companies based on their stage of development: pre-seed companies, seed-stage companies, and venture-stage companies with an established private venture capital fund identified as a lead investor.

“We know that even when we completely control for credit worthiness, small business owners of color, women, face unfair loan denials and higher interest rates,” Gene Sperling, senior adviser to the president and American Rescue Plan coordinator, said during a briefing with reporters.

“We know that too much venture capital goes to just a few cities and parts of our country,” he added. “And the SSBCI, the State Small Business Credit Initiative, is designed to ensure that … capital is flowing everywhere and that it’s going to those who have the best ideas, the best plans for their community, the best job growth.”

In Alaska, up to $59.9 million in federal money will boost lending to commercial fishing, mariculture, manufacturing and tourism, according to a statement from the U.S. Treasury Department.

“The impact of Alaska’s programs is expected to be greatest in rural and remote communities that have struggled to attract capital in commercial fishing and mariculture, manufacturing, and tourism sectors with high upfront capital costs,” according to the summary.

Minnesota Democratic U.S. Sen. Amy Klobuchar, whose state would receive up to $97 million, said during the call that funding would go toward “early stage investments in key sectors like information technology, software, ag, clean technology, manufacturing and more.”

In Nevada, five different programs will get up to $112.9 million for loan and venture capital programs. The funding is expected to lead to more than 2,000 jobs and to capital improvements for energy and water efficiency at commercial properties.

“That’s something that really makes a difference here in the desert—we’re the hottest, we’re the driest, we’re the sunniest state, so that will certainly be helpful,” Rep. Dina Titus, a Nevada Democrat on the press call, said of the investments in energy and water efficiency.

Jacob Leibenluft, U.S. Treasury chief recovery officer, said that federal officials are directing the funding toward small businesses that have traditionally had a harder time accessing capital.

“We know that during the peak of the pandemic, the small businesses who too often have been shut out of the financial system historically, including minority-owned small businesses, are often hit the hardest,” Leibenluft said. “And that’s why we intentionally designed the program to drive investments to underserved entrepreneurs.”

Tuesday’s announcement of an additional $1 billion in federal dollars for 11 states brings the total amount of money approved for the program to $4.8 billion for 31 states.

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Jennifer Shutt
Jennifer Shutt

Jennifer covers the nation’s capital as a senior reporter for States Newsroom. Her coverage areas include congressional policy, politics and legal challenges with a focus on health care, unemployment, housing and aid to families.

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