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State Small Business Credit Initiative (SSBCI)

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State Small Business Credit Initiative (SSBCI)

The state of Oregon applied for federal funds to bolster existing small business financing programs, as well as create new programs to provide and support access to capital for new and growing Oregon businesses. The U.S. Treasury announced in August 2022 that Oregon's application was approved and the State Small Business Credit Initiative (SSBCI) will steer $83.5 million into Oregon.

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While there are many elements of how these programs will operate that are established based on federal regulations, state requirements, and/or agency program requirements, Business Oregon is engaging with the capital and technical assistance communities regarding how some of these strategies may best be executed. Business Oregon is ensuring awareness and accessibility to this funding for businesses statewide with particular emphasis on businesses owned by individuals that have historically been socially and economically disadvantaged. 

Business Oregon held virtual meetings about the SSBCI funding and each of the programs. All of the information can be found on the SSBCI Program Informational Resource Page.  

Program Information

  1. Venture Capital Programs 
  2. Loan Participation Programs 
  3. Loan Guarantee Programs 
  4. Collateral Support Programs 
  5. Capital Access Programs  
  6. Small Business Technical Assistance

The funding guidelines and requirements are still in the process of being finalized by the U.S. Treasury.  

  • Some of the fundamental programs requirements include: 
  • Minimum private match of 1:1 for each transaction, but Oregon must deliver a 10:1 private funding leverage in total for the entire allocation.  
  • Individual business project expense and funding rounds must be less than $20 million and the business must have fewer than 500 employees. 
  • Grants and forgivable loans are prohibited 
  • Socially and Economically Disadvantaged Individuals are an intentional focus for all equity and debt funding concepts 
  • Primary purpose of the programs and transactions are to support business start-up or expansion  
  • Restrictions on eligible use of funds (e.g., refinances, renewals, advance rates, etc.)
This is the second iteration of SSBCI, the first came in 2010, where Oregon was allocated $16.7 million. Oregon was able to get all the funding into the hands of businesses through three existing small business finance programs at Business Oregon while meeting all of the U.S. Treasury’s requirements.  ​

Business Oregon is taking an endowment approach to the funding and allocating it through four self-sustaining strategies.  These strategies were developed within the bounds of the federal guidelines, supported with input from initial engagement with partners in the business, investment and finance communities, and with input from Business Oregon’s Commissions, Boards and Committees. 

Of the funding, $42 million  will be used for innovation-related small business equity and debt through two funding approaches; Business Oregon Venture Capital Programs and Venture Capital Debt Programs. An additional $41.5 million of the funding will be used to support small business commercial lending needs common to the retail, service, agriculture, processing, distribution and manufacturing industries through both Loan Guarantees with Private Lenders and through the Community Re-lender Fund.​

Programs

Two new programs will support equity investments in early-stage, high-growth companies. The Business Oregon Venture Fund Program​ will investment in emerging and existing angel and venture capital funds investing in Oregon startups. The Business Oregon Venture Direct Program will select a co-investment partner to make direct equity investments in other Oregon startups.  Soon, there will be a Request for Proposals issued to identify a co-investment fund manager, and to identify angel and venture capital funds to invest in.  ​

The Oregon Royalty Fund​, administered by Business Oregon, provides debt funding alternatives for high growth, traded sector companies. The Oregon Royalty Loan Program (existing) provides direct loans, paired with equity investments, and repayment is based solely on a percentage of revenues. The Oregon Angel Loan Program (new), will provide patient debt, matched with an equity investment, with interest-only payments with a balloon payment and exit fee due at a liquidation event or loan maturity. ​

The Credit Enhancement Fund​ is an existing program that leverages the capital of banks and credit unions statewide by providing loan insurance for loans and lines of credit that otherwise could not be approved. Through this program, businesses can obtain low-cost private capital for lines of credit, construction loans, and term loans for permanent working capital, equipment and real estate acquisition. ​

​A new program that will provide low-cost capital to community lenders, such as Community Development Financial Institutions (CDFIs), Economic Development Districts (EDDs), tribal governments and not-for-profits. The program will purchase a portion of a community lenders loan increasing their lending capacity.  ​​​

The SSBCI Technical Assistance Program is intended to identify organizations to provide legal, financial, and accounting technical assistance to businesses owned by socially and economically disadvantaged individuals (SEDI) and very small businesses (VSB) seeking to secure funding from the agency’s State Small Business Credit Initiative (SSBCI) programs. The federally funded SSBCI program was designed to deploy capital to small businesses across the state, particularly SEDI-owned businesses and VSBs. In order to receive the maximum amount of SSBCI funding, Business Oregon must meet the SEDI and VSB capital deployment targets established by the U.S. Treasury. The technical assistance providers selected through this RFGA will be a key partner in meeting these goals and helping minimize capital access disparities between SEDI and VSB firms and their counterparts.  ​

The application window for SSBCI TA applications closed on October 4, 2023. Business Oregon is currently reviewing applications and anticipates announcing awards in December. Pending successful contract negotiations, SSBCI TA providers will be listed on Business Oregon’s SSBCI program webpage.​