After its first successful year, there is no question that the Alaska State Small Business Credit Initiative (SSBCI) program stands out. Not only because it is located in one of the most stunning states and serves an incredibly diverse community, but its administrative lead, the Alaska SBDC, is the only Small Business Development Center (SBDC) in the nation to do so. Alaska SBDC is a partner program of the University of Alaska Anchorage Business Enterprise Institute (BEI) and housed under it, Alaska SSBCI stimulates economic growth, fosters innovation, creates jobs, and contributes to community development across the state.
About SSBCI
Alaska has been allocated to receive roughly $59,000,000 throughout the 10-year Alaska SSBCI program, and as the lead, the Alaska SBDC will deploy the funding to lenders and investment funds. This initiative recognizes that a robust small business ecosystem is crucial for Alaska’s economic vitality, and it aims to bridge the funding gap that often hinders the growth of promising ventures that may be socially or economically disadvantaged. The funds will also support promoting American entrepreneurship and democratizing access to startup capital nationwide, including in rural and underserved communities.
SSBCI provides states and tribal entities with funding for:
- Credit and investment programs for existing small businesses and start-ups
- Technical assistance to small businesses applying for SSBCI funding and other government small business programs
The Alaska SSBCI program is deploying $59 million in funding through the following funding programs:
- Venture Capital/Equity Funds – $10 million
- Loan Participation Program – $15.9 million
- Loan Guarantee Program – $32 million
- Alaska Collateral Fund Program – $2 million
Alaska SSBCI prioritizes supporting investments in businesses owned and controlled by SEDI and VSB:
- Socially and Economically Disadvantaged Individuals (SEDI): 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. 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 compared to those in the same business area who are not socially disadvantaged.
- Very Small Business (VSB): A business with fewer than ten employees and may include independent contractors and sole proprietors.
Alaska SSBCI 2023 In Review:
In the first nine months of operations in 2023, Alaska SSBCI successfully closed loans worth $28,918,345 for 34 businesses. Out of these 34 businesses, 29 identified themselves as SEDI businesses. These businesses were spread across 22 communities, with loans ranging from $21,000 to $8,000,000. Lending partners included First National Bank Alaska, Northrim Bank, Business Impact Northwest, and Cook Inlet Lending Center, and they played a significant role in closing these impactful deals.
What should you know about Alaska SSBCI?
- Loan Guarantees: One of the cornerstones of the Alaska SSBCI is its provision of loan guarantees. This enables local businesses to secure financing from traditional lenders, mitigating the risk for entrepreneurs and financial institutions. By providing this crucial layer of security, the initiative empowers businesses to pursue growth opportunities that might otherwise be out of reach.
- Capital Injection: Alaska SSBCI injects vital capital into Alaskan businesses through various channels, stimulating economic activity across diverse sectors. From technology startups in Anchorage to fishing enterprises in Juneau, the initiative supports many businesses, recognizing the unique challenges and opportunities across the state.
- Technical Assistance: Beyond financial support, Alaska SSBCI offers invaluable technical assistance to help businesses thrive. The Alaska SBDC provides mentorship, training, and resources to entrepreneurs, fostering a culture of knowledge-sharing and skill development. This approach ensures that small businesses can access funds and the guidance needed to successfully navigate the complex entrepreneurship landscape.
For entrepreneurs looking to tap into the resources offered by the Alaska SSBCI, the first step is to connect with the program. Alaska SSBCI serves as a hub for information, support, and assistance, guiding businesses through the application process and helping them access the resources best suited to their needs.
The Alaska State Small Business Credit Initiative is not merely a financial program but a testament to the commitment of the Alaska SBDC, the University of Alaska Anchorage, and its lending partners to foster a thriving business community. By supporting small businesses, the initiative contributes to the economic well-being of communities across the state, ensuring that Alaska remains a land of opportunity for generations. Learn more at https://aksbdc.org/ssbci/