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Louisiana to Receive Up to $113 Million in State Small Business Credit Initiative

On December 6, 2022, the U.S. Treasury announced that Louisiana will receive up to $113 million in funding under the State Small Business Credit Initiative (SSBCI) to support small businesses.  The SSBCI is a federal program administered by the U.S. Treasury that provides resources to state programs that support private financing to small businesses that are creditworthy but unable to access capital through conventional means.  The American Rescue Plan Act reauthorized and expanded the SSBCI, which was originally established in 2010, providing for a combined $10 billion in funding to states to use towards these programs.

What types of programs are available to Louisiana businesses and how will they be administered?

In Louisiana the SSBCI-funded programs are administered by the Louisiana Economic Development Corporation (LEDC), which will deploy SSBCI funding through the following five programs:

  • Micro Lending Program: This loan participation program establishes a revolving loan fund with qualifying lenders to provide financial assistance to very small businesses with start-up or expansion business needs.
  • Collateral Support Program: This program establishes pledged cash collateral accounts with participating financial institutions to cover loans to small businesses with collateral shortfalls.
  • Small Business Loan Guaranty Program: This program provides loan guarantees to participating lenders on the loans to small businesses to assist with their business development or expansion needs.
  • Venture Capital Program: This equity program supports small business expansion by placing SSBCI funds into participating equity funds that provide private financing through investment in small businesses.
  • Seed Capital Program: This equity program places SSBCI funds into participating equity funds that provide private financing through seed stage investment to start-ups and early-stage small businesses.

The majority of Louisiana's SSBCI funding–up to $91.5 million–is allocated to the Venture Capital Program and the Seed Capital Program.  To implement these equity programs, the LEDC will partner with approved venture capital funds, angel funds, and nonprofit organizations.  Both programs will target very small businesses and businesses owned by socially and economically disadvantaged individuals.

What are the requirements for participation?

Louisiana SSBCI-funded programs are subject to numerous guidelines and requirements, some of which include:

  • Participating equity funds and lenders cannot provide credit or investment support in a transaction that exceeds $20 million. For loan programs the $20 million restriction applies to the principal amount of the loan.  For equity programs an investment round cannot exceed $20 million.
  • SSBCI funding cannot be used to invest in or loan to a business in which a SSBCI insider has a personal financial interest according to SSBCI conflict of interest standards.
  • Participating equity funds may only use up to an annual average of 1.71% of SSBCI money to pay for services to their portfolio companies.
  • No two funds can use SSBCI money in the same funding round. 

How can equity funds apply?

A number of equity funds have already been approved for SSBCI funding.  The application process to become a participating fund is still open.  Visit for more information.

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