The US government’s $10B small biz program, explained

The State Small Business Credit Initiative (SSBCI) is a small biz program targeting disadvantaged groups.

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The US government’s $10B small biz program, explained


The US government has spent more than that amount to prop up small businesses since the start of the pandemic, per The Wall Street Journal.

The funds haven’t been evenly distributed, though. And the government is trying to rectify that…

… with a new $10B commitment

The program is called the State Small Business Credit Initiative (SSBCI) and funds will come from the $1.9T covid relief package passed last March.

One of the main goals is to direct money toward disadvantaged groups including racial minorities, rural communities, and veterans.

Republicans are questioning the need for the Democratic initiative, noting that there is an overlap with other programs.

Where did previous funds go?

According to WSJ, the flagship Paycheck Protection Program (PPP) — primarily targeted at small businesses — provided fewer loans on average “in areas with majority Black, Hispanic, American Indian or Alaska Native populations.”

On top of this, it’s estimated that criminals have stolen ~$100B — yes, billions — in covid relief funds. We’re going to go out on a limb and say that money didn’t end up covering payroll for your neighborhood bakery.

How it works

Per the Treasury, the federal government will use the funds to back investing and lending activities, with $3.5B specifically allocated for these buckets:

  • $500m: Very small businesses (fewer than 10 employees)
  • $2.5B: Total state funds for businesses owned by the socially and economically disadvantaged
  • $500m: Technical assistance

States will receive money based on a formula that accounts for hardships (e.g., job losses vs. national average). From there, they set programs — from loans to venture capital — that best target their respective locales.

A major obstacle for the SSBCI is letting people know they are eligible. So, here’s an application overview.

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