FRANKFORT, KY (WOWK) – The Bluegrass State has been awarded $117 million to help small businesses across Kentucky succeed.
According to Kentucky Governor Andy Beshear, the funding comes from the U.S. Department of Treasury’s State Small Business Credit Initiative (SSBCI). Beshear says the award will be allocated in three phases over a 10-year period.
With the funding, Beshear says the state will be launching a “suite of initiatives” called the “Kentucky Small Business Credit Initiative 2.0” as an effort to help businesses still recovering from the pandemic and boost the state’s future economy. The governor says the funding will support a variety of venture capital programs, loan support programs and Community Development Financial Institutions. According to Beshear, these efforts will include an emphasis on making sure underserved business owners have access to the funds.
According to the governor, the state expects to receive the first round of funding within 60 days.
“These funds are a boost for businesses still recovering from the pandemic, but also represent a potential watershed for the future of innovative businesses in our state,” Beshear said. “This significantly increases the capital available to promising businesses at critical early stages and helps lay the foundation for Kentucky’s innovative economy of the future. We must also acknowledge that while the talent and energy of our entrepreneurs and small-business owners are unmatched, the opportunity has not existed in equal measure. This funding will help more Kentuckians who may have been excluded from that opportunity in the past to realize their dreams of owning and growing a business.”
According to Beshear, the Cabinet for Economic Development’s KY Innovation will be in charge of distributing the funding. Beshear also says the state is planning to allocate the funding toward areas KY Innovation has “identified as lacking within its startup network.”
Businesses who qualify for funding will be able to get support through certified lending institutions for loan programs and through the Kentucky Science and Technology Corporation’s Keyhorse Capitol for investment capital, according to the governor’s office.
“Back in 2010, Kentucky used these SSBCI dollars to increase loan security and saw tremendous success,” said Monique Kuykendoll Quarterman, executive director of KY Innovation. “These funds enable us to build upon that success by strengthening that loan capital program and investing heavily into our venture capital community. Moreover, we are building a better commonwealth for all by ensuring that all Kentuckians, including those who have historically had difficulty accessing or have outright been denied access to capital, are able to get the resources needed to make their dreams a reality. It’s a great day for every Kentucky founder and for the future of entrepreneurship in our state.”
According to the governor’s office the Treasury Department’s SSBCI was authorized as part of the American Rescue Plan Act, building upon the program’s 2010 initiative. Beshear’s office says during the first initiative in 2010, Kentucky used the funds to create the first Kentucky Small Business Credit Initiative with the goal of securing loans by “covering gaps between lent capital and posted collateral of up to 20%.”
Beshear says the $117 million from the SSBCI will also support the Kentucky Collateral Support Program and the Kentucky Loan Participation Program to help the programs continue helping lending institutions finance “creditworthy” businesses in need of financial assistance.