- Florida will receive $488.4 million from the U.S. Treasury as part of the State Small Business Credit Initiative
- Through the SSBCI funding, the state will operate five programs: a collateral support program, a loan participation program, a loan guarantee program, an equity/venture capital program, and a capital access program
- The Treasury disclosed that Florida allocated $250 million to the collateral support program and $100 million to the Florida Venture Capital Program
Florida, among six additional states, will receive a collective $1.5 billion from the U.S. Treasury under the State Small Business Credit Initiative (SSBCI), the U.S. Department of the Treasury announced this week. Of the announced states, Florida will receive the most money at $488.4 million.
Through the SSBCI funding, the state will operate five programs: a collateral support program, a loan participation program, a loan guarantee program, an equity/venture capital program, and a capital access program.
The Treasury disclosed that Florida allocated $250 million to the collateral support program, which works to provide cash collateral accounts to financial institutions in order to enhance the collateral coverage of borrowers.
The program is generally modeled on a state-sponsored Small Business Administration 504 bridge loan program, which has operated since 2017.
“This is a historic investment in entrepreneurship, small business growth, and innovation through the American Rescue Plan that will help reduce barriers to capital access for traditionally underserved communities,” said Secretary of the Treasury Janet L. Yellen. “These SSBCI funds will promote equitable economic growth across the country.”
The state further allocated $100 million to the Florida Venture Capital Program, which makes equity co-investments in emerging Florida companies.
According to a recent White House report, more Americans are starting new businesses than ever before. In 2021, Americans applied to start 5.4 million new businesses – 20 percent more than any other year on record. Small businesses with fewer than 50 workers created 2.8 million jobs in 2021 – the highest rate of small business job creation ever recorded in a single year
The SSBCI funds come as part of the American Rescue Plan and its attempt to financially assist business owners directly affected by the economic recession spurred by the outbreak of COVID-19
“The work Treasury has done through the implementation process to ensure SSBCI funds reach traditionally underserved small businesses and entrepreneurs will also be critical to ensuring the small business boom continues to lift up communities disproportionately impacted by the pandemic,” said the Treasury.
The Motley Fool rated Florida as the third-best state in the country for small businesses, lauding its attractive tax climate.
Only some business structures must pay state income taxes in Florida, such as C corporations. However, if a business owner sets up their entity as an LLC, sole proprietor, or S corporation, they are exempt from income tax.
Moreover, the state boasts a 5.5 percent corporate tax rate, and no payroll taxes.