Colorado Secures $100M+ Funding to Create Jobs

Polis Administration Secures $100M+ Funding to Create and Retain 11,000 Jobs through the State Small Business Credit Initiative Grant

DENVER (STL.News) Governor Jared Polis, the Colorado Office of Economic Development and International Trade (OEDIT), Senators Bennet and Hickenlooper, and State Treasurer Dave Young announced that the U.S. Treasury Department has awarded the State of Colorado a State Small Business Credit Initiative (SSBCI) grant.  This funding could result in more than $100 million over the next 5+ years to leverage ten times that amount in private financing to help Colorado’s small businesses access the capital they need to invest in their businesses and create new jobs across the state.

“This exciting federal grant creates and supports over 11,000 good-paying jobs for Coloradans and builds upon our work supporting small businesses and entrepreneurs, saving people money, and making sure Colorado remains the best place to live, work, and do business,” said. Gov. Jared Polis.

“This is an historic investment in entrepreneurship, small business growth, and innovation through the American Rescue Plan that will help reduce barriers to capital access for traditionally underserved communities including those in rural areas,” said U.S. Secretary of the Treasury Janet L. Yellen.  “I’m excited to see how SSBCI funds will promote equitable economic growth in Colorado and across the country.”

SSBCI was created as a part of the federal American Rescue Plan Act (ARPA), to fund venture capital and loan participation programs to empower small businesses to access capital needed to create good-paying new jobs.  The Polis Administration continues to support Colorado small business owners by expanding state programs that have a proven track record of helping small businesses thrive:  the Venture Capital Authority, the Cash Collateral Support Program, and the CLIMBER fund.  Through these programs, it is estimated that the SSBCI funds will help create and retain more than 11,000 jobs over the next ten years.  The economic impact to the labor market is expected to be an additional $423 million, on average, in wage income per year.

“We passed the American Rescue Plan last year to support small businesses across Colorado and strengthen the communities they call home.  As Coloradans continue to recover from a difficult few years, I’m pleased to welcome these funds to Colorado to help local companies retain their employees and create new jobs,” said Sen. Michael Bennet.

“Small businesses are still struggling with rising costs, the lingering effects of the pandemic, and labor shortages.  This partnership between the federal government and states will help new and existing businesses grow and thrive,” said Sen. John Hickenlooper.

Colorado received the initial installment of approximately $31 million in SSBCI funding this month, with additional installments available as the funds are lent and invested.  Over the next 5+ years, Colorado could receive up to $104,773,554 in funding to build on an already strong track record with three proven programs:

  • The Venture Capital Authority (VCA), which will receive up to $59,773,554 in SSBCI funding, helps Colorado’s entrepreneurs and startup businesses access venture capital.  The VCA partners with professional venture fund managers that are aligned with its mission to fill gaps in Colorado’s venture capital market.  The SSBCI funds will support the creation of new venture funds that leverage private investment and equity investments to fuel new businesses that are projected to create or retain 2,900 jobs over the next 10 years.  These funds will also support businesses and communities that have historically experienced diminished access to funding and business development programs.
  • The Cash Collateral Support Program, administered by Colorado Housing and Finance Authority (CHFA), will receive up to $35 million in SSBCI funding.  This program supports small business lending through a credit enhancement program that provides cash deposits to lenders to supplement borrower collateral for business loans. Over 10 years, this program has provided $37,455,700 in collateral support for 376 loans totaling $200,097,994 and has never experienced loss of capital.  The new SSBCI funds are projected to help create or retain over 8,000 jobs over the next 10 years.
  • The CLIMBER fund, overseen by the Colorado State Treasury in collaboration with OEDIT and administered by CHFA, will receive up to $10 million in SSBCI funding.  This fund provides working capital loans to Colorado small businesses negatively impacted by the pandemic.  The SSBCI funds are projected to help create or retain over 800 jobs over the next 10 years.

SSBCI funding will be administered by the Colorado Economic Development Commission and OEDIT’s Division of Business Funding and Incentives in collaboration with the Governor’s Office, the State Treasurer’s Office, the Venture Capital Authority, and CHFA.

“We’re putting people back to work. We know the economic recovery from COVID will continue long after the health pandemic subsides.  As one of the largest state-involved loan efforts in America to come out of the coronavirus pandemic, we are humbled to play this critical role in helping Colorado small businesses get back on their feet.  The success of a business thriving through a financially-challenged pandemic depends on access to capital,” said Treasurer Dave Young.

“Small businesses are the heart of communities, providing not just products and services, but livelihood and connection for residents.  Supporting these businesses with access to capital is essential to fostering and maintaining strong local economies and communities throughout Colorado.  CHFA is honored to partner on the effort to deploy new SSBCI funding through programs we administer, increasing the opportunity for economic prosperity,” said Jaime Gomez, CHFA Deputy Executive Director and Chief Operations Officer.

SSBCI funds will also support technical assistance and training to prepare businesses for participation in these and other access-to-capital programs.

As part of its participation in SSBCI and in keeping with existing state program guidelines, the State will emphasize more equitable access to startup capital throughout the implementation of these programs, including very small businesses of nine people or fewer and communities traditionally lacking the resources for small businesses to access capital.  Efforts will also be made to target those with diminished access to capital and business development programs.

“This funding is a win for small business owners across Colorado and the workers who will benefit from these new jobs. Our office will work diligently to efficiently and effectively deploy these funds so we can maximize this award and continuously offer capital access programs that can benefit generations to come as they grow their businesses,” said OEDIT Executive Director Patrick Meyers.

The SSBCI funds will be managed as revolving loan funds, with the intention of creating an evergreen pool of capital that can be reinvested in small businesses over time in order to provide ongoing access to capital and support for decades to come.

SSBCI was reauthorized and funded by the federal government in 2021 as a part of the federal American Rescue Plan Act (ARPA) to expand access to capital for small businesses, promote economic resiliency, create new jobs, and increase economic opportunity.  Originally established in 2010, Colorado’s 2010 allocated funding helped create the Cash Collateral Support program to help small- to medium-sized businesses who had difficulty accessing capital due to a lack of collateral.  This program has been very effective at supporting access to capital for very small businesses.  Over 80% of the program’s total loans supported businesses with fewer than 10 employees, and 63% supported businesses with fewer than 5 employees.  Over the 10 years of its operation, that has meant $132 million in loans to these very small businesses.

The new SSBCI provides nearly $10 billion to states, the District of Columbia, territories, and Tribal governments to increase access to capital and promote entrepreneurship, especially in traditionally underserved communities as they emerge from the pandemic.  SSBCI dollars are not allowed by federal law to be used as grant funding.

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