By David Lawder
WASHINGTON (Reuters) - The U.S. Treasury Department on Monday said it approved nine state plans for the State Small Business Credit Initiative worth $940 million, bringing total approvals under the COVID-19 recovery venture capital program to $1.5 billion.
The $10 billion SSBCI program aims to address a shortage of capital for new business startups and other small business development, particularly in disadvantaged communities, by attracting $10 of private investment for every $1 of taxpayer funding. It was reauthorized and expanded as part of last year's $1.9 trillion American Rescue Plan Act.
The state plan approvals announced on Monday include a variety of venture capital funds, loan participation programs, loan guarantees, collateral support programs and portfolio insurance to make capital more accessible to small firms and entrepreneurs.
Connecticut was approved for up to $119.4 million to launch two new venture capital funds supporting entrepreneurs from "underserved and diverse backgrounds" and a climate technology fund for clean energy, environmentally safe manufacturing, and climate resiliency.
"We're going to be investing equity, hopefully alongside other investors as well," into "young, entrepreneurial, scrappy companies," Connecticut Governor Ned Lamont told a news briefing. "I think you're going to see this $120 million grow to $1 billion in investments over a period of time and represent tens of thousands of jobs."
Pennsylvania was approved for up to $267.8 million, Alabama for up to $111 million, South Carolina for up to $101.3 million, Indiana for up to $99.1 million, Maine for up to $62.2 million, New Hampshire for up to $61.5 million, South Dakota for up to $60 million and Vermont for up to $57.9 million.
The funds are released in tranches, with each subsequent disbursement dependent on meeting performance targets from prior funds.
A Treasury official said that there was now a "strong pipeline" of additional state plans that were close to being approved, and the Treasury hopes to be finished reviewing all state applications by late summer.