MN, IA to receive up to $97 million in small business credit funds – ABC 6 News

(ABC 6 News) – The US Treasury Department on Tuesday approved State Small Business Credit Initiative (SSBCI) funds for 11 states, including Minnesota and Iowa.

Last year there was a 20% increase in small business apps, more than any other year. Small businesses created 2.8 million jobs last year, according to a White House report.

The Treasury wants to reach small businesses that are traditionally underserved, such as minority and women-owned businesses, and give them the resources to succeed.

“The state’s small business credit initiative is designed to ensure, again, that capital flows everywhere. Let it go to those with the best ideas, the best plans for their community, and the best job growth,” said senior White House adviser Gene Sperling.

The small business boom has also been observed locally in Rochester. More and more people have left their jobs to become entrepreneurs and start their own businesses. However, the lack of start-up funds stops many businesses before they even start.

“Starting and running a business takes a lot of funding and a lot of money,” said Rick Indrelie, business consultant for the Small Business Development Center. “A lot of people don’t have deep enough pockets to start a business, so what we call seed capital injection, or seed funding or gap funding, is a critical component.”

The $97 million coming into Minnesota will operate six programs, from loans to seed funds to investment funds.

Iowa will receive up to $96.1 million to operate two venture capital programs to invest in startups ($53 million), a collateral support program to facilitate lending ($15.1 million) and a loan participation program for equipment and automation financing ($28 million).

RELATED: $209,000 Awarded to Innovative Small Businesses in Rochester – ABC 6 News – kaaltv.com

Minnesota will receive up to $97 million to run two venture capital programs through the University of Minnesota ($34.5 million), a loan participation program for businesses in need of machinery, equipment or software ($12.5 million) and a multi-fund operation called the Growth Loan Fund, which is expected to invest in startups related to information technology, software, life sciences, to agriculture, clean energy and manufacturing.

The US Treasury has now approved 31 state plans, totaling about $4.8 billion in SSBCIs.

SSBCI was re-licensed and expanded as part of the 2010 US bailout.

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