Earlier this year, Governor Larry Hogan announced that Maryland was rolling out up to $198 million in small business relief funded by the state’s Federal Small Business Credit Initiative, further saying that Maryland remains “open for business” as part of its economic recovery from the COVID-19 pandemic.
Created by Congress in 2010 to provide loans and investments to underserved small businesses, the State Small Business Credit Initiative received a $10 billion allocation under the American Rescue Plan Act of 2021. Recognizing the huge opportunity for small businesses and entrepreneurs in the state, Maryland was the first state in the nation to submit its rollout plan to the US Treasury Department and among the first five states to be approved.
Under the Maryland State Small Business Credit Initiative plan, nine state business loan and investment programs were expanded and enhanced. The programs are administered by three state agencies: the Maryland Department of Housing and Community Development, the Maryland Department of Commerce, and the Maryland Technology Development Corporation.
The nine programs support companies whose growth opportunities are limited due to the pandemic or a historic divestment. The State of Maryland’s Small Business Credit Initiatives targets communities and areas with high concentrations of small businesses, micro-enterprises, and socially and economically disadvantaged individuals (SEDI) to support the state’s continued investments in underserved communities. Increasing these proven and successful programs ensures that these new resources are deployed quickly and efficiently to eligible businesses and entrepreneurs. To complement these nine programs, the state’s Small Business Credit Initiative also provides eligible businesses with technical assistance, including legal, accounting, and financial advisory services.
The Maryland Department of Housing and Community Development administers its $103 million in state Small Business Credit Initiative funding through three Neighborhood BusinessWorks initiatives. The Neighborhood BusinessWorks program provided more than $70 million under the Hogan administration to fund new, expanding small businesses that support revitalization in Opportunity Zones, Priority Funding Zones, Sustainable Communities, and Growth Zones. investment from Maryland’s Designated Community Development Finance Institutions. These new federal resources have significantly increased the capacity of Neighborhood BusinessWorks’ traditional loan participation program, which helps eligible businesses acquire working capital and real estate. Neighborhood BusinessWorks also launched two new program initiatives. The Neighborhood BusinessWorks Loan to Lender initiative directly supports the revitalization and investment efforts of community development finance institutions, leveraging their unique knowledge and community partnerships by providing funds to lend back to small businesses local. The Neighborhood BusinessWorks Venture Loans initiative supports strategic businesses with high economic impact and potential job growth.
The Maryland Department of Commerce is deploying its $45 million allocation from the state’s Small Business Credit Initiative through two Maryland Small Business Development Financing Authority programs, a loans and an equity investment program. Established in 1978 to promote the viability and expansion of businesses run by socially and economically disadvantaged people, the resources of Maryland’s Small Business Development Funding Authority are made available to small businesses that are not in able to obtain adequate commercial financing on reasonable terms. In particular, the program has become a well-established resource to support the growth of minority and women-owned businesses. Maryland Small Business Development Financing Authority’s reach and lending is bolstered by a network cultivated and expanded over the years to include government agencies, local economic development organizations, banks and capital companies -investment, as well as many professional associations, chambers of commerce and local professionals.
The Maryland Technology Development Corporation will channel the state’s $50 million Small Business Credit Initiative funds to four existing programs targeting Maryland technology businesses and entrepreneurs. Three programs – the Venture Equity Fund, the Venture Capital Limited Partnership Equity Program and the Seeds Funds Equity Program – are primarily focused on venture capital and seed funding. The fourth, the Social Impact Fund, provides investment and support to entrepreneurs who are at an economic or social disadvantage. Through these four programs, TEDCO will continue to strengthen its relationships with leading technology companies, entrepreneurs, and investors in the state while collaborating with universities, regional business accelerators and incubators, and other organizations. .
Backed by the expertise and experience of these state agencies, Maryland State’s Small Business Lending Initiatives offer a range of financing and technical assistance options that can support many new and growing in Maryland. To learn more or ask for help, visit open.maryland.gov/ssbci.
This article is featured in the 2022 edition of The Daily Record’s Expanding Opportunities Resource Guide for Small, Minority and Women Businesses which was published September 23. diversity, entrepreneurship, and innovation in Maryland’s small business community. Learn more about Expanding Opportunities or read the digital edition.