An Alabama small business engine is slated to receive nearly $98 million in funding from a federal program.
Innovate Alabama will accept the allocation for its work to fuel Alabama's small businesses and entrepreneurs.
The funding, the largest small business funding program the state has seen, according to a release, is made available by the U.S. Department of the Treasury State Small Business Credit Initiative (SSBCI). The SSBCI allocation has been made possible through the American Rescue Plan Act of 2021, which directed funds to states to broaden access to capital and resources for small businesses with a goal of promoting economic resilience, job creation and expanding opportunities. The primary mission is to encourage and back private investments as opposed to solely filling a gap in the capital markets with public funds.
"The SSBCI program will be a catalyst for our state’s entrepreneurial ecosystem, establishing an evergreen fund to improve access to capital for Alabama small businesses and entrepreneurs," said Innovate Alabama CEO Cynthia Crutchfield. “With the advent of this program, we’re welcoming a new era for entrepreneurs in Alabama. I’m eager to witness the lasting benefits of the investment in the state, including the stimulation of a self-sustaining, durable investment landscape.”
The dual-component program, LendAL and InvestAL, will finance loan and venture capital initiatives intended to enhance lender and investor confidence in Alabama and infuse capital directly into the businesses of the state’s startup founders and small business owners. The funding is made possible based on Act 2024-74, a piece of legislation passed through the Alabama State Legislature earlier this month and signed into law by Gov. Kay Ivey.
Through the SSBCI program, Innovate Alabama will connect entrepreneurs with the investors and resources they need to prosper and grow.
“As Alabama continues to signal that it's open for business, it is crucial that we continue to contribute to the growth of the state’s economy through our small businesses. This is a sector that has played a pivotal role in defining Alabama's history,” Ivey said. “With the SSBCI program, we will demonstrate to both investors and business owners that Alabama represents a sound investment opportunity.”
The SSBCI is an often-overlooked, pandemic-era program that is currently doling out billions in the form of direct investments and subsidized loans. Nearly $10 billion is earmarked for states, territories and tribal governments to set up their own programs to help small businesses access capital. It's part of a series of federal programs that aim to expand access to capital for small businesses — including a host of new initiatives from the Small Business Administration.
The news comes on the heels of a recent influx of funding locally from Innovate Alabama. A slew of Birmingham companies were awarded funding from Innovate Alabama, totaling around $350,000. Innovate Alabama revealed its second round of funding designees from the Innovate Alabama Network, totaling $8 million given to entities across the state. The funds are given through designation awards and project grants.
