Puerto Rico Approved to Receive Federal Funding Through the State Small Business Credit Initiative to Support Small Business Financing Programs
Treasury Department Announces Puerto Rico to Receive up to $109 Million to Promote Small Business Growth and Entrepreneurship through President Biden’s American Rescue
Today, the U.S. Department of the Treasury announced Puerto Rico will receive up to $109 million in funding under the State Small Business Credit Initiative (SSBCI) in President Biden’s American Rescue Plan. Treasury has now announced the approval of state and territory plans corresponding to over $6 billion in SSBCI funding to support small business and entrepreneurship and expand access to capital. Treasury has also previously announced plans to deploy $300 million in technical assistance funding through SSBCI, a portion of which will be delivered in partnership with the Minority Business Development Agency at the Department of Commerce.
“Empowering small businesses and entrepreneurs, especially in traditionally underserved communities, is critical to advancing our shared vision for a more equitable economy,” said U.S. Deputy Secretary of the Treasury Wally Adeyemo. “Today’s announcement – alongside our colleagues and partners in the Department of Commerce and government of Puerto Rico – underscores the Biden-Harris Administration’s deep commitment to the people of Puerto Rico and our goal to help create economic opportunity for them.”
“I’d like to thank our federal partners at Treasury for this necessary investment that will help the backbone of the Puerto Rican economy: small businesses and entrepreneurs,” said U.S. Deputy Secretary of Commerce and Puerto Rico Economic Growth Coordinator Don Graves. “This opportunity helps ensure that all businesses in every corner of the archipelago, especially small and disadvantaged businesses, can participate and benefit.”
“Our public policy goal is to capitalize the Puerto Rico Economic Development Bank in order to expand our ability to promote the development of new businesses and the expansion of existing ones,” said Governor Pedro Pierluisi. “We thank the Biden-Harris Administration and the U.S. Department of the Treasury for providing up to $109.3 million to the Puerto Rico Economic Development Bank to help us grow our economy, creating more jobs and opportunities for the American citizens of Puerto Rico.”
The Commonwealth of Puerto Rico, approved for up to $109.3 million, will operate two programs: a collateral support program and a loan participation program. The loan participation program, allocated $21.8 million, will participate in commercial loans and loans targeting specific strategic sectors for economic development. The collateral support program, allocated $87.4 million, provides collateralized guarantees to lenders and the program structure allows for broader participation of financial institutions operating in Puerto Rico. Both programs will target low- to moderate-income communities, and other underserved communities and be administered by the Economic Development Bank for Puerto Rico.
The American Rescue Plan reauthorized and expanded SSBCI, which was originally established in 2010 and was highly successful in increasing access to capital for small businesses and entrepreneurs. The new SSBCI builds on this successful model by providing nearly $10 billion to states, the District of Columbia, territories, and Tribal governments to increase access to capital and promote entrepreneurship, especially in traditionally underserved communities as they emerge from the pandemic. This includes $2.5 billion in funding and incentives to support underserved businesses. SSBCI funding is expected to catalyze up to $10 of private investment for every $1 of SSBCI capital funding, amplifying the effects of this funding and providing small business owners with the resources they need to sustainably grow and thrive.
In January, the Census Bureau released data which showed that over the last two years, Americans have applied to start 10.5 million new businesses, making 2021 and 2022 the strongest two years on record for new business applications. The investments being made through SSBCI are a key part of the Biden-Harris Administration’s strategy to keep this small business boom going by expanding access to capital and by providing entrepreneurs the resources they need to succeed. The work Treasury has done through SSBCI’s implementation process to ensure these funds reach traditionally underserved small businesses and entrepreneurs will continue to be critical to ensuring the small business boom lifts up communities disproportionately impacted by the pandemic.
In addition to catalyzing private investment in states across the country, the State Small Business Credit Initiative provides historic investments in U.S. territories, with significant impacts for growing access to credit in these markets. Through SSBCI, Treasury has allocated over $300 million to support small businesses and entrepreneurs in U.S. territories and will continue to review applications for those funds.