The U.S. Department of the Treasury has announced that Illinois will receive up to $354.6 million to manage four programs as part of the State Small Business Credit Initiative (SSBCI). The expanded program offerings will allow Illinois to support small businesses statewide by helping them attract more capital investment, expand or launch business operations and support key sectors. The new programs will launch in the near future.
“Here in Illinois, we’re proud to take the lead through innovation in our small business community,” said Governor JB Pritzker. “This small business funding program will help further accelerate our economy by providing business owners with the capacity for increased investment and expansion opportunities throughout the state.”
A major challenge for small businesses is gaining access to funding and capital, especially those owned by historically underrepresented populations such as women and people of color. Illinois’ SSBCI funding allows the state to expand its small business support programs.
“Small businesses are the backbone of our Illinois economy, and we look forward to offering new programs that increase access to capital for Illinois entrepreneurs as they launch and grow their businesses,” said Department of Commerce and Economic Opportunity Director Sylvia Garcia. “With a focus on equity, these programs will help hundreds of Illinois businesses in communities across the state, especially those who have historically encountered barriers to accessing capital.”
Illinois’ four programs include the existing Advantage Illinois program, which offers favorable funding terms through a loan participation model; a new Advantage Illinois loan guarantee model, which will support businesses that have had problems receiving loans in the past; a new venture capital direct equity program that will support emerging technologies and industries; and a Climate Bank Finance program to provide loans to small businesses in the clean energy industry.
The SSBCI was reauthorized as part of the American Rescue Plan Act (ARPA). The SSBCI program provides a combined $10 billion to states, and Illinois was eligible to receive up to $354.6 million.
“It’s not easy being a small business owner– so many people are putting their family’s finances on the line to take risks that create jobs and make our communities stronger,” said State Senator Dave Koehler (D-Peoria). “By supercharging our small business lending programs, we are investing in our neighborhoods and our future.”
“We know that Black-owned businesses regularly have trouble accessing the capital needed to build thriving businesses and communities,” said Representative Nick Smith (D-Chicago). “Investing $354.6 million for small business lending won’t solve everything, but it will provide a leg up to those that need it. And by giving minority-owned businesses an even lower interest rate, we are helping those that have long been left out.”
“Illinois has been on the forefront of clean energy innovation,” said Representative Dagmara Avelar (D-Bolingbrook). “Investing in a Climate Bank to support entrepreneurs taking risks on groundbreaking technology puts us on a path to a carbon-free future.”
The programs supported by the SSBCI include:
Advantage Illinois (AI) Loan Participation Program (Existing Program)
Advantage Illinois’ existing Loan Participation Program offers low-interest loans to small businesses by working with local lenders across the state. As of December 2022, 71% of AI loans have gone to businesses owned by people of color, women, people with disabilities or veterans.
Advantage Illinois (AI) Loan Guarantee Program (New Program)
Advantage Illinois’ new Loan Guarantee Program will help business applicants who are having problems accessing capital by using funds to guarantee a percentage of loans provided by partner lenders. Guaranteeing a percentage of the loan makes loans more attractive to lenders and has the potential to increase the funds received by the businesses.
INVENT Venture Capital Program (VCP) (New Program)
Innovation Venture Fund (INVENT) will operate as a direct equity program, focusing on investing in businesses in key industries such as agriculture, ag tech, information technology, life sciences, manufacturing, quantum, and more.
Climate Bank Finance Loan Participation Program (New Program)
This new program will be overseen by DCEO and administered by the Illinois Finance Authority (IFA), which will partner with local lenders to issue the loans. Climate Bank funds will be available to small businesses in the clean energy sector.
Interested businesses can fill out a form here to receive information and updates when the programs are launched.