Maryland state agencies will use $198 million in federal relief funds to support programs for small businesses whose growth has been stymied by the pandemic and historic disinvestment in underserved communities.
The funds are part of a $10 billion allocation through the American Rescue Plan Act to the State Small Business Credit Initiative, which Congress created in 2010.
The Maryland Department of Housing and Community Development (DHCD), the Maryland Department of Commerce, and the Maryland Technology Development Corporation (TEDCO) will administer the funds to nine Maryland business lending and investment programs.
The state will focus on underserved communities with high concentrations of small businesses, micro businesses, and businesses led by “socially and economically disadvantaged” individuals.
“The State of Maryland’s small business programs are proven and effective, providing critical relief during the pandemic and supporting strong economic growth during our ongoing recovery,” Gov. Larry Hogan said in a statement. “This additional funding will ensure Maryland continues to remain open for business by supercharging these programs to increase capacity and better serve entrepreneurs and small businesses, especially those creating jobs and other opportunities that fuel the revitalization of disinvested communities.”
The state’s housing and community development department will disburse up to $103 million to three initiatives by the Neighborhood BusinessWorks program, which provides financing to new and expanding small businesses in target investment areas.
Neighborhood BusinessWorks will use the funds to lend to small businesses in Community Development Financing Institution (CDFI) investment areas, help eligible businesses obtain working capital and acquire real estate, and support businesses that have a high potential for job growth.
DHCD Secretary Kenneth Holt said Neighborhood BusinessWorks has provided more than $70 million in capital to small businesses during the Hogan administration.
“These additional resources and new program initiatives will leverage the program’s successful partnerships and processes to assist new and expanding businesses in cities, towns, and communities throughout Maryland,” Hot said in a statement.
The state’s commerce department will disburse up to $45 million through two programs from the Maryland Small Business Development Financing Authority, which was formed in 1978 to assist businesses led by “socially and economically disadvantaged” individuals, such as minority- and women-owned businesses.
“The MSBDFA program is an important finance tool in helping underserved small businesses owners and their communities throughout our state,” Maryland Commerce Secretary Mike Gill said in a statement. “This federal funding has the potential to help numerous entrepreneurs in Maryland and provide the much-needed business assistance they have been seeking. We are grateful for this additional financing and look forward to helping our business community continue its economic recovery.”
TEDCO will administer up to $50 million to four programs that are targeting Maryland technology businesses and entrepreneurs.
Venture capital and startup funding is the primary focus of three of the programs: the Venture Equity Fund, Venture Capital Limited Partnership program, and Seeds Funds Equity program.
The fourth program, the Social Impact Fund, invests in entrepreneurs who are economically or socially disadvantaged.
TEDCO CEO Troy LeMaile-Stovall said in a statement the $50 million will support the four programs’ goals to “help innovators and entrepreneurs achieve their dreams and scale.”
“These SSBCI funds will help TEDCO accelerate our mission of empowering early-stage technology innovation and entrepreneurship,” LeMaile-Stovall said.
To learn more about the programs that are receiving funds through the State Small Business Credit Initiative or to apply, visit visit http://open.maryland.gov/ssbci.
