A Boost for Entrepreneurs: Mississippi to Reap $86M from American Rescue Plan
Unpacking the Impact: How SSBCI Funding Will Propel Mississippi’s Small Businesses
Mississippi has recently taken a significant stride towards fostering entrepreneurial growth and economic rejuvenation, courtesy of an $86 million approval under the State Small Business Credit Initiative (SSBCI), a segment of President Biden’s Investing in America agenda. The overarching objective: equipping small businesses and burgeoning entrepreneurs with the capital they necessitate to prosper. Particularly, this investment aims to bolster those in historically underserved communities.
Before we delve into the particulars of Mississippi’s state plan, it’s noteworthy that the American Rescue Plan Act breathed new life into the SSBCI, which was initially instituted in 2010. Throughout the decade since its inception, SSBCI has proven instrumental in expanding capital access for small enterprises.
The revitalized SSBCI program draws from its predecessor’s successful blueprint, appropriating nearly $10 billion across states, territories, and Tribal governments. Among these funds, $2.5 billion is earmarked explicitly for the sustenance of underserved businesses. Interestingly, the SSBCI funds are predicted to instigate a domino effect by catalyzing an additional $10 in private investments for each dollar of SSBCI capital funding.
As we circle back to Mississippi’s allocation, let’s scrutinize how the state intends to allocate these funds across four distinct programs. Of the $86 million, Mississippi will be allotting $45 million to the Mississippi CDFI Small Business Loan Fund. This program envisages providing funds as loans to Community Development Financial Institutions (CDFIs) that, in turn, will endorse lending to small enterprises within the state.
Alongside, Mississippi is assigning $15 million to the Mississippi Venture Capital Program. This program is dedicated to granting equity support to small businesses by pooling resources into venture capital funds that bolster startups. An additional $11 million will be invested directly into startups, with a particular emphasis on those involved in the manufacturing and supply chain sectors.
Besides the aforementioned allocations, the state is also setting aside $15 million for a loan guarantee program that endeavors to extend access to capital for underserved small businesses. This program will offer loan guarantees of up to 80%.
So, what does this signify in a broader context?
In January, data from the Census Bureau indicated that over the past two years, applications to commence new businesses in America have touched 10.5 million, marking 2021 and 2022 as historical zeniths in new business applications. The SSBCI investments, including Mississippi’s substantial allocation, align with the Biden-Harris administration’s resolution to prolong this small business renaissance by amplifying access to capital and furnishing entrepreneurs with essential resources.
While the US Treasury’s approval of Mississippi’s state plan is a commendable progression in a series of approvals that has amounted to over $8 billion in SSBCI funding, the implementation and execution of these plans will be crucial. With an eye towards the future, these programs could hold the key to nurturing an environment of innovation, sustainable growth, and economic resilience, particularly in communities that have been historically marginalized or disproportionately affected by the pandemic.
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