Alaska Small Business Development Center

Loan Participation Program

The Alaska Loan Participation Program will provide both side-by-side loans originated by the lenders and loan purchase options to support loan participation for qualifying small businesses.

  • For the loan purchase option, the SBDC will purchase a portion of a loan from a private lending institution after the loan has closed/been funded to the eligible borrower. The Loan Participation Program will purchase up to 50 percent of the total loan, with a maximum of $10 million of SSBCI funds available.
  • For the subordinated portion of the loan, the state funds are provided at below market interest rates never to exceed the National Credit Union Administration’s (NCUA) interest rate ceiling for loans made by federal credit unions as described in 12 U.S.C. § 1757(5)(A)(vi)(I) and set by the NCUA board.

The program staff will not re-underwrite the loans in this program, but rather will review the bank’s lending assessment to determine if the participation support request is reasonable and conforms to the program restrictions and requirements. The lead bank is responsible for servicing, collections, and liquidation, with the SBDC receiving semi-annual and delinquency reports.

In the event of default, the SBDC will not recover any collateral or other assets associated with the loan.

Loans supported through this program are expected to range in size from $500,000 to $1,500,000 on average. These funds will be distributed through loans originated through the lending institution applying for the program. SSBCI Loan Participation funding amounts are estimated to average about 50% of the total loan, with loans to socially and economically disadvantaged individual owned businesses (SEDI) and very small businesses (VSBs) given priority in the application process. The majority of loans will average a three year repayment schedule.

Questions

Contact Jon Bittner at jon.bittner@aksbdc.org.

How To Apply

A lenders application link will be posted here in January, 2023.

SSBCI News

Alaska Launches $59 Million Small Business Financing Program