More Help is on the Way for Alabama Small Businesses

Gone are the days of getting a loan simply by picking up the phone and calling your banker. Lenders today must make decisions using a complex set of factors to determine the loan eligibility of a small business borrower.

On March 11, 2021, President Biden signed the American Rescue Plan Act which provides $10 billion to fund the State Small Business Credit Initiative (SSBCI). SSBCI essentially makes it easier for banks and other lenders to issue loans to small businesses who might not otherwise meet their requirements. This is made possible because states can use their allocation of SSBCI funds to issue partial guarantees to lenders for small business loans, drastically reducing the risk to the lender and making it much easier to extend credit to a small business owner.

The last time this program was initiated was in response to the 2008-2009 financial crisis and now, as we are still feeling the effects from a COVID lockdown-induced recession, the program is back.

On February 11th, the Alabama Department of Finance applied to the US Treasury Department for Alabama’s portion of SSBCI funding. The State of Alabama was so serious about getting its share of SSBCI funds and using this program as a shot in the arm to our state’s economy that our leaders went a step further than was required. The application outlined how we plan to use the money and even included legislation that was crafted to ensure the success of the program.

That legislation is currently making its way through the State House, and if passed, the program will be turned over to the Alabama Innovation Commission to write the regulations.

The first deposit of money is set to hit the state’s bank account this summer, so stay tuned as more details on participating in the program become clear. 

One thing we know for sure right now: more help is on the way for Alabama small businesses, allowing our state’s economy to continue to grow.

The Business Council of Alabama is Alabama’s foremost voice for business. The BCA is a non-partisan, statewide business association representing the interests and concerns of nearly 1 million working Alabamians through its member companies and its partnership with the Chamber of Commerce Association of Alabama. The BCA is Alabama’s exclusive affiliate to the U.S. Chamber of Commerce and the National Association of Manufacturers.