North Carolina small businesses will soon get a financial leg up from the federal government. The U.S. Treasury Department announced it has approved the state's application for funding under the State Small Business Credit Initiative (SSBCI).
North Carolina is now slated to receive up to $202 million to "promote small business growth and entrepreneurship." The SSBCI program is funded through the federal COVID-19 relief package known as the American Rescue Plan.
The State Small Business Credit Initiative was reauthorized and expanded with $10B in funding by @POTUS’s American Rescue Plan. I’m in North Carolina today to meet with recipients of SSBCI funds, and announce $200M+ more for small-business support in NC. https://t.co/XUuE14DX8Q
— Deputy Secretary Wally Adeyemo (@TreasuryDepSec) July 29, 2022
According to a federal treasury department statement, North Carolina will use the funds to "operate three different programs, including a loan participation program to which it has allocated $160 million."
The state has partnered with the NC Rural Center to administer the program with the goal of helping to support "small business recovery" and to "revitalize central business districts," the treasury says.
Just announced: The NC Rural Center was granted authority to administer the second allotment of the State Small Business Credit Initiative (SSBCI) funding appropriated under the federal American Rescue Plan Act (ARPA) through the 2021-2023 FYS Budget.
— NC Rural Center (@NCRuralCenter) July 29, 2022
In North Carolina, there were more than 170,000 new business applications in 2021 alone. According to the latest census data, that's double the figure from just four years prior. About 32% of people employed in North Carolina work at companies with fewer than 100 workers, according to Census.
But these young businesses, especially in underserved communities, can struggle with access to capital. The State Small Business Credit Initiative should provide some relief to these upstarts.
A boom in new small businesses is happening across the country, President Biden said during Small Business Week last month.
"We saw businesses with fewer than 50 workers create jobs last year at the highest rate ever recorded," said Biden.
The federal seed loan is intended to help businesses leverage that funding into bigger loans from financial institutions to sustainably grow.
WUNC's Laura Pellicer contributed to this report.
