The US Treasury is offering a new installment of $10 billion in pandemic aid to small businesses in 4 states

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The US Treasury Department’s latest round of aid is on its way to small businesses as recession fears continue to mount across the country.

The US Treasury Department on Friday announced plans to roll out its third round of funding from the newly authorized State Small Business Credit Initiative (SSBCI) to Colorado, Montana, New York and Oregon. Overall, the four additional states have been approved to receive up to $751 million in aid.

The SSBCI is a small business assistance program that has been around since 2010 but was replenished in March 2021 thanks to the $1.9 trillion American Rescue Plan Act signed into law by President Joe Biden.

The $10 billion funding program aims to expand access to capital for underserved communities. SSBCI funds are not distributed directly to companies but go to lenders. Eligible small businesses and start-ups — typically defined as businesses with 500 employees or fewer — can borrow or invest as usual through their bank, municipal lender, or financier.

The news follows an earlier release of funds in May to five states: Hawaii, Kansas, Maryland, Michigan and West Virginia. The five states were awarded relief of up to $639 million.

In July, the Treasury Department approved an additional $1.5 billion in funding after nine state plans from Arizona, Connecticut, Indiana, Maine, New Hampshire, Pennsylvania, South Carolina, South Dakota and Vermont gave the green light. The agency has so far announced more than $2.25 billion in funding approvals, or nearly a quarter of the $10 billion program.

The Treasury Department estimates that the program could generate $10 in private investment for every $1 in federal funding — bringing the total number of states to $100 billion in lending authority.

A range of resources are available to companies through the SSBCI, including venture capital, access to capital, collateral support, loan participation and loan guarantee programs. State governments previously submitted their individual plans to the Treasury Department, describing how they would allocate the funds to small businesses.

For its part, Montana says it will use its funding to implement a loan-sharing program and plans to expand opportunities for the state’s rural and Native American entrepreneurs. Colorado expects to oversee three separate small business-focused programs and specifically allocate $10 million of its SSBCI allocation to help businesses recover from the pandemic. Colorado Gov. Jared Polis praised the announcement in a news release Friday, saying the funding will help support more than 11,000 jobs in the Centennial State.

US Treasury Secretary Janet Yellen echoed the praise: “This is a historic investment in entrepreneurship, small business growth and innovation by the American Rescue Plan, which will help remove the barriers to accessing capital for traditionally underserved communities, including those in rural areas,” Yellen said in a statement on Friday.

The roadmap for future versions and the level of relief are unclear. Details are expected to be announced once funding is approved.

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