Governor Youngkin has announced that Virginia has been approved for up to $230 million by the federal U.S. Department of the Treasury under the State Small Business Credit Initiative (SSBCI) program to accelerate the formation and growth of entrepreneurial businesses across the Commonwealth. The credit lending and early-stage equity financing programs available through SSBCI will provide Virginia-based businesses with increased access to both public and private capital, especially around under-represented communities and entrepreneurs.
“Start-ups and small businesses are critical to our future and job creation. This initiative will expand our existing funding programs for companies with high potential for rapid growth and significant economic development,” said Governor Glenn Youngkin. “We must have an economy that encourages innovation and entrepreneurship across the Commonwealth because new businesses create opportunities that lift up all Virginians.”
Virginia’s allocated SSBCI funding is expected to catalyze up to 10x of private investment for every $1 of SSBCI invested capital deployed. The Virginia Small Business Financing Authority (VSBFA) will offer expanded credit support and Technical Assistance to small businesses through the SSBCI program. The Virginia Innovation Partnership Corporation (VIPC) will co-invest equity alongside matching private capital in Virginia’s leading start-ups, explore opportunities in emerging sectors vital to Virginia’s future, and support other organizations within Virginia’s entrepreneurial ecosystem. The aggregate SSBCI funds will be disbursed in three separate tranches based on the achievement of specific criteria objectives.
“Virginia has a remarkable history of being the birthplace of innovations that have changed the world. This funding will help extend our impressive and successful track record. Our goal is to expand entrepreneurial ecosystems and unleash small businesses and entrepreneurs as a pathway to success for their groundbreaking ideas and new products and services,” said Secretary of Commerce and Trade Caren Merrick.
Approximately $57 million of the SSBCI funding will be allocated to VSBFA and deployed through three loan programs to eligible small businesses. VSBFA is Virginia’s business and economic development financing arm which is aligned within Virginia’s Department of Small Business and Supplier Diversity (DSBSD) which provides loans to Virginia businesses for economic growth and expansion.
“The Technical Assistance program included in the SSBCI will benefit very small businesses, which have 10 employees or less, and those that are owned and controlled by socially and economically disadvantaged individuals,” said Willis Morris, Director of the Virginia Department of Small Business and Supplier Diversity. “These companies often have difficulty securing the funding that is needed to grow their enterprises. We are committed to doing our best to empower the opportunities that very small start-ups need.”
Approximately $173 million of the SSBCI funding will be allocated to VIPC, the operations arm of the Virginia Innovation Partnership Authority (VIPA), and deployed through two co-investment equity / venture capital programs. VIPC will leverage the SSBCI funding to significantly expand its current seed and early-stage direct co-investment program for Virginia-based technology start-ups, which VIPC manages through its Virginia Venture Partners (VVP) division. VVP will also initiate a new indirect investment program through SSBCI funding that enables limited partner capital commitments to emerging and established seed investment funds in order to further support start-up growth and stimulate risk capital infrastructure within Virginia’s entrepreneurial ecosystems.
“The SSBCI funding will enable VIPC to increase its support for the vibrant entrepreneur community that exists across Virginia,” said VIPA Board Chair, Dr. Barbara Boyan. “VIPC is there at every step of the commercialization process, from business validation to revenue generation, which helps entrepreneurs build financially viable and stable companies.”
VIPC is offering more information about the SSBCI program through daily information sessions (www.virginiaipc.org/vvp) and on its website, www.VirginiaIPC.org.