SSBCI: State Small Business Credit Initiative

On March 11, 2021, President Biden signed The American Rescue Plan Act (ARPA), which reauthorized and funded the State Small Business Credit Initiative (SSBCI). The new version of the SSBCI program provides a combined $10 billion to states, the District of Columbia, territories, and Tribal governments to empower small businesses to access capital needed to invest in job-creating opportunities as the country emerges from the pandemic. The funds will also support recipient jurisdictions in promoting American entrepreneurship and democratizing access to startup capital across the country, including in underserved communities. 

Read more about the SSBCI program on the US Dept. of Treasury website.

U.S. Treasury Objectives
  1. Promote Equity. The program has a capital allocation to business enterprises owned and controlled by socially and economically disadvantaged individuals (SEDI-owned businesses), along with incentive funds for jurisdictions that demonstrate robust support for SEDI-owned businesses.
  2. Catalyze Private Investment. SSBCI is designed to catalyze $10 of small business lending and investment for every $1 of SSBCI capital program funding, magnifying the effects of the federal funds allocated through the program.
  3. Fuel Economic Growth and Good Jobs. SSBCI will build on the Administration’s work to support small businesses while combating longstanding structural inequities in access to credit and unequal opportunities for growth revealed and exacerbated by the pandemic.

New Mexico is allocating capital to TWO different programs:

Jurisdictions may select from five different programs to deploy capital per SSBCI regulations. The allocated amounts and programs can change at any point during the 10 years and are  dependent upon the outcome of the landscape research. Businesses should expect to be able to apply to selected funds for capital by Spring 2023.

During the current assessment phase, the split between the programs is as follows:

  1.   $64 million to VC (Venture Capital)/Equity Funds
  2.   $9 million to Collateral Support

Program Updates:

  • New Mexico is allocated to receive ~$74,000,000 over the course of the 10-year program.
  • EDD is the administrative lead on the program for the state.
  • EDD signed New Mexico’s allocation agreement on September 8, 2022. The department has 90 days to enable access to programming.
  • EDD is in the process of hiring a financial coordinator to manage CAP.
  • EDD has activated an advisory committee to provide oversight and guidance on VC/Equity program development.
  • EDD has contracted with Avivar Capital to serve as the investment advisor to the State of New Mexico. 

1. VC/Equity Funds

EDD and Avivar Capital created a program guidelines summary. In March, EDD requested exploratory information from funds interested in participating in the program. EDD is working with Avivar to conduct a review of the proposals. The firm is also conducting a review of the capital landscape in New Mexico. The information collected during this process will help inform the strategic deployment of capital. 

Businesses are not eligible to apply for funding at this time. If you represent a qualifying VC/Equity Fund interested in participating, please submit an inquiry and preliminary information below.

2. Collateral Support Program (New Mexico Collateral Assistance Program - CAP)

EDD can pledge cash to cover a collateral shortfall of a loan in order to enable financing that otherwise might not be available to a small business.

Learn more about CAP.

The SSBCI program provides support and capital allocation specifically to Business Enterprises Owned and Controlled by Socially and Economically Disadvantaged Individuals (SEDI) and Very Small Businesses (VSBs):

  • SEDI: Socially and Economically Disadvantaged Individuals. Defined by reference to section 8 of the Small Business Act (15 U.S.C. 637), the definition includes:
    1. Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities.
    2. Economically disadvantaged individuals are those socially disadvantaged individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged.
  • VSB: Very Small Business is defined as a business with fewer than 10 employees; and may include independent contractors and sole proprietors.

The state would like to work directly with communities, businesses, and investors. If you want to provide feedback or ideas on how EDD can generate the greatest impact with this program, please submit your feedback on the form below.