The Mississippi Development Authority, the primary agency for community and economic development in the state, is set to receive up to $86 million in federal funding to bolster small businesses and startups.
This funding is a part of the State Small Business Credit Initiative, which was expanded and reauthorised under the American Rescue Plan Act of 2021. The U.S. Treasury Department will oversee the distribution of these funds.
The state agency plans to utilise its share of the federal funds to support four key programs. These programs include a loan guarantee initiative, a loan participation program, and two equity and venture capital programs.
The loan guarantee program, with a budget of $15 million, aims to enhance capital access for underserved small businesses by guaranteeing loans up to 80%.
The loan participation program, which has been allocated $45 million, will provide funds in the form of a loan to community development financial institutions (CDFIs). These institutions have a mission to provide fair and responsible financing to both rural and urban communities. The primary goal of this program is to increase small businesses’ access to capital and promote economic growth and job creation.
The Mississippi Venture Capital Program, backed with $15 million, will invest in venture capital funds that support startups. Administered by Innovate Mississippi, the program’s objective is to attract and retain high-growth businesses.
The Direct Program, funded with $15 million, is focused on startups in the pre-seed, seed, and Series A stages of initial funding. This program does not serve as the lead investor and requires participation from a lead investor in a funding round. Deals of various sizes can receive program-provided matches of up to $1 million.
Laura Hipp, deputy executive director of the state development agency, expressed excitement about the SSBCI and its potential impact on Mississippi’s small businesses and startups. By investing in these local companies, they aim to generate new job opportunities and foster further economic growth in communities across the state.