Billions in small-business funds keep flowing. Here’s who’s making money available.

Billions in small-business funds keep flowing. Here’s who’s making money available. (Courtesy of the Jacksonville Business Journal) — Missouri’s Department of Economic Development recently announced more than $2.9 million in grant funding to expand entrepreneur and small-business support services across the state — everything from in-person training programs and virtual classes to one-on-one consultations. 

The support also includes legal, accounting and financial advisory services to help businesses improve their credit and access new sources of capital. And it will focus on rural areas and underserved businesses that have not typically been able to access such services.

“Many entrepreneurs are passionate about growing their businesses while staying rooted in their communities,” said Rachel Munday, executive director of efactory, which has partnered with the state, as part of Missouri’s announcement of the funding. “By expanding resources to all corners of the state, we can provide more assistance and connections that help small businesses thrive no matter their location. This grant will enable us to open doors to new opportunities for many entrepreneurs and small business owners who are eager to grow and make an impact.”

The efforts in Missouri mark just some of what are hundreds of ways to support small businesses that are being funded through the State Small Business Credit Initiative and run by the U.S. Treasury Department. The initiative is among the last of the Covid-19 era small-business support programs that are still pushing money out the door. In this case, the SSBCI was set up by Congress with $10 billion in a bid to leverage that funding with up to $100 billion of private dollars in the form of loan guarantees, direct investments or other programs.

About $8.9 billion of the $10 billion has been allocated to state and local governments to date. Of that, $3.9 billion has been disbursed by the Treasury Department, according to data through the end of 2024 and released in late March. In turn, those state and local governments have disbursed or spent about $2.2 billion in SSBCI funds through their various programs — which means there is more funding to be had by small businesses.

Local governments have allocated about 64% of the promised funding to support loans with loan-guarantee and loan-participation programs, while 36% of the money has been allocated to equity and venture-capital programs, including direct-investment programs, fund-investment programs and debt programs designed to spur investments in small businesses. 

Unsurprisingly, California, Florida and New York have deployed the most funding in absolute dollar amounts, as they have among the largest allocations.

Montana, Vermont and Alaska have deployed the most funding as a total percentage of their overall allocation by the Treasury Department.

Some recent examples of SSBCI funds being deployed include:

• A pair of investments by Innovate Alabama in two venture-capital firms, genera8tor Alabama and Measured Capital, through its InvestAL program.
• Business Oregon awarding Hillsboro venture-capital fund Elevate Capital between $10 million and $15 million to invest in startups across the state.
• SecondWave Systems Inc., a clinical stage medical device company developing an ultrasound-based treatment for inflammatory disorders, recently announced it had raised $7 million for its Series A financing round, with some funding coming from SSBCI funds.

The report from the Treasury Department represents the last full quarter under the Biden administration. Advocates for the SSBCI worried the program’s focus on underserved small businesses would make it a target of the Trump administration’s cuts or funding freezes. So far, state officials contacted by The Playbook have said they have not noticed a slowdown or freeze in funds.

But that doesn’t mean small-business programs writ large have been immune from the Trump administration’s Department of Government Efficiency or related efforts to slash spending and federal personnel.

Lender and small-business groups have issued warnings regarding a March 14 executive order geared at reducing what it called “unnecessary” elements of the federal government. The order targeted a variety of agencies, including the Community Development Financial Institutions Fund and the Minority Business Development Agency, directing government officials to eliminate all functions not specifically authorized by a federal statute and to reduce those statutory functions to the minimal extent possible. 

In fiscal 2024, the CDFI Fund awarded $789 million in grant funding to local lenders to make small-business loans. It also allocated $5 billion for the New Market Tax Credit Program and guaranteed nearly $3 billion in bonds through its CDFI Bond Guarantee Program. CDFIs make up about 30% of the lenders participating in the SSBCI and make up 63% of all credit transactions under the SSBCI program, according to the Small Business Majority. 

Small-business owners can look up their own state and local programs to find out if they qualify for funding. Business owners should also reach out to their local CDFI, small-business development center or other business association to find out more information.

The SSBCI program is set to run through at least 2030.