Harrisburg, Pa. (August 29, 2022) – Small businesses make a big impact — on both national and local levels. As major players in the national economy they define character and impact their own communities. But as the economy is recovering from the pandemic, some businesses have found recovery more difficult than others.
That is why the Harrisburg Regional Chamber & CREDC, in partnership with several economic development institutions, has applied for funding for small time businesses through the PA State Small Business Credit Initiative (PA-SSBCI).
Led by the Chester County Economic Development Council, CREDC has partnered with the Lebanon Valley EDC, Greater Berks Development Fund, Bucks County EDC, and Delaware County Economic Development Oversight Board to apply for money to seed a revolving loan fund which will provide capital to qualified small business throughout our communities.
The American Rescue Plan reauthorized and expanded the SSBCI, which was originally in place from 2010 until 2017, to respond to the 2008-2009 financial crisis. This inaugural version of the SSBCI delivered around $1.5 billion to states and generated over $10 billion of investment funding into state programs supporting small businesses.
As part of this reauthorization, Pennsylvania has been approved for $268 million. The funds will be used to operate three programs, including an equity capital investments program and venture capital investments program. Funds will be distributed by the Department of Community and Economic Development to boost the success of small businesses and increase job creation opportunities across the state.
The first two programs – equity capital investments and venture capital investments – have been allocated a combined total of $142 million. Direct equity investments will be made in seed and early-stage technology companies in Pennsylvania through longstanding partners Ben Franklin Technology Partners and Life Sciences Greenhouses, as well as venture capital investments in new funds under the management of underserved venture capital firms.
The third program, which CREDC is applying for in a collaborative effort with other economic development organizations, is a loan participation program that has been allocated more than $125 million within the Commonwealth. It will extend loans of no more than 50 percent of total financing to small business borrowers through certified economic development organizations (CEDOs) and community development financial institutions (CDFIs). The funding will also contain reserved allocations to benefit socially and economically disadvantaged individuals (SEDI-owned businesses) and very small businesses (VSBs).
CREDC and its partners serve a large portion of Commonwealth and have applied for $27 million to serve our communities. This figure was chosen based on the percentage of population our communities represent. If awarded, a relative percentage of the funding for each county served will be reserved for a period of time based on the county’s percentage of population within this group. CREDC serves Cumberland, Dauphin and Perry Counties.
Melissa Stone, Vice President of Economic Development for the Harrisburg Regional Chamber & CREDC stated, “Collaborative efforts among economic development organizations such as this one creates efficiencies of delivery, maximizes the limited resources dedicated to such organizations and leverages the capacity of each to its fullest. CREDC is pleased to partner with our peers in South Central and Southeastern PA in this effort.”
As the Pennsylvania attempts to build a stronger economy, legislation like the SSBCI is critical. The initiative is designed to focus on small businesses and typically underserved areas. The SSBCI has the potential to make a big impact on the success and bottom-line of small businesses across the State by helping drive significant capital where it’s needed most. CREDC eagerly awaits a decision from DCED and hopes that this collaboration is awarded funding so that the CREDC team can get to work on helping SEDI-owned businesses and VSBs throughout our region.