News: The US Plans to Spend $10 Billion to Help Small Businesses Recover and Grow
Small businesses in the country went through difficult times in the recent past. Supply chain disruptions, poor cash flow, diminishing demands were just a few of the many hurdles small businesses faced due to the pandemic.
The new year 2022 has brought new hopes for small businesses. A WSJ report states the federal government is going to spend 10 billion to help small businesses survive and thrive. The money will come from the $1.9 trillion covid relief bill.
The State Small Business Credit Initiative (SSBCI) will handle this money and send it to tribal governments, territories, and states for programs that offer venture capital or loans to small businesses.
Promoting Equity in Small Business Funding
When it comes to accessing money, not all businesses have the same success. For example, upper-income areas received substantially more PPP loans.
And research indicated that 79 % of white-owned firms got all of the PPP fundings they applied, but the share decreased to 43% for black-owned firms.
The main objective of this recent funding is to empower small business owners to access money to invest in job-creating opportunities. Also, the funds will support American entrepreneurship in recipient jurisdictions and democratize access to startup capital across the country in underserved communities.
In order to promote equity at the forefront, the Treasury allocated $2.5 billion from the total money for jurisdictions to reach socially and economically disadvantaged businesses and for rewarding jurisdictions that succeed in reaching those businesses.
Deputy Secretary of the Treasury Wally Adeyemo said in a prepared statement,
America’s economic competitiveness is built on our innovation and on the entrepreneurs who have been able to turn their ideas into successful businesses
The statement further added,
For too long, those in underserved communities have not had equal access to capital and the opportunity to pursue their visions. The pandemic only deepened that divide, hitting small businesses owned by people of color especially hard. The SSBCI program seeks to change that by providing capital for investments in small businesses across the country, creating jobs, and giving small business owners in all communities a chance to compete and thrive.
New Year Means New Opportunities
Small businesses are improving with time. In 2022, 17 Million new small businesses are expected to be launched. And small businesses that struggle to get capital can benefit from the recent funding. This means the new year is going to be good for small businesses in the country.
Small business growth expert, Ramon Ray, said,
It is undoubtedly a good move. The recent small business funding will help businesses,which don’t have access to money due to color, place, or size, find sources of capital to plan a long-term recovery and thrive.
You can read the full WSJ report here.