West Virginia will receive up to $72.1 million from the U.S. Department of the Treasury under a new round of the State Small Business Credit Initiative (SSBCI) to increase access to capital and promote entrepreneurship, especially in traditionally underserved communities as they emerge from the pandemic, according to a press release.
The American Rescue Plan reauthorized and expanded SSBCI, which was originally established in 2010.
The West Virginia Capital Access Program (WVCAP), which manages SSBCI funding under the West Virginia Jobs Investment Trust (WVJIT), increases access to capital for traditionally underserved small businesses and entrepreneurs across West Virginia.
This additional SSBCI funding is expected to catalyze up to $10 of private investment for every $1 of SSBCI capital funding.
The WVJIT submitted a plan to the Treasury for how they will use this SSBCI allocation to provide funding to small businesses, including through venture capital programs, collateral support programs, and subordinated debt programs.
West Virginia’s plan is one of only five states so far to receive Treasury approval.
West Virginia will operate a seed capital co-investment fund with more than half of its allocation, increasing small businesses’ access to venture capital in a state with no resident venture capital firms and annual average venture capital investment well below the per capita national average.
Statewide and regional nonprofits, as well as Community Development Financial Institutions (CDFIs), will partner with community banks and CDFIs to use the remaining balance of the funds for two loan programs. These loan programs will serve West Virginia businesses needing business loans.
An announcement will be made when funds are available later this year.