Virginia to Receive over $230 Million for Small Business Growth
According to a press release from the U.S. Department of the Treasury, Virginia has been approved to receive federal funding through the State Small Business Credit Initiative. Virginia will receive over $230 million from the Department of the Treasury to promote small business growth and entrepreneurship through the American Rescue Plan.
Through the Initiative, Virginia will operate five programs: two loan participation, one loan guarantee, and two equity/venture capital programs. The loan programs will consist of $57 million to be deployed to eligible small businesses. The equity/venture capital programs have combined allocations of over $173.4 million. The direct program will provide equity co-investments to private capital invested in seed and early-stage technology companies and the funds program will provide limited partner investment commitments to Virginia-based venture capital firms raising new funds. It will also stimulate private capital investment in new Virginia-based funds investing in entrepreneurs from underserved communities in the state.
The American Rescue Plan reauthorized and expanded the State Small Business Credit Initiative, which was originally established in 2010 and was highly successful in increasing access to capital for small businesses and entrepreneurs. The new State Small Business Credit Initiative 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. State Small Business Credit Initiative funding is expected to catalyze up to $10 of private investment for every $1 of State Small Business Credit Initiative capital funding, amplifying the effects of this funding and providing small business owners with the resources they need to grow and thrive.
A White House report found that more Americans are starting new businesses than ever before. In 2021, Americans applied to start 5.4 million new businesses – 20% more than any other year on record. Small businesses with fewer than 50 workers created 2.8 million jobs in 2021 – the highest rate of small business job creation ever recorded in a single year. The investments being made through the State Small Business Credit Initiative are a key part of the Biden 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.