The Indiana Economic Development Corp. distributed $29 million Tuesday to a loan participation program meant to financially support underserved entrepreneurs and Hoosier small businesses with loans for operating capital.
The loan program, called the Legend Fund, is backed by federal funding from the State Small Business Credit Initiative. Small businesses work directly with approved lenders to access funding that supports what their business needs to grow.
By giving lenders an incentive to fund small businesses, the program’s $29 million is expected to yield a minimum $50 million impact on Indiana’s small business ecosystem.
“Mission-oriented and non-traditional lenders” that provide a loan, according to an IEDC news release, will be eligible to have up to 49% of their loans purchased by the IEDC, freeing up money to keep supporting Indiana businesses. Lenders can register online.
Nine lenders have already been approved, including Indiana Community Business Credit Corporation, Build Fund and One Southern Indiana, the chamber of commerce for Clark and Floyd counties in Southern Indiana. Other specialty lenders or local revolving loan funds are encouraged to go through the approval process.
In the release, Indiana Secretary of Commerce David Rosenberg said Indiana is setting an example for what it looks like to support an environment that helps small businesses start and grow.
“With even more funding and new programs like the Legend Fund, we’re taking our support of the entrepreneurial ecosystem even further, ensuring all small businesses have equitable access to the tools, resources and capital needed to succeed,” Rosenberg said.
A digital portal connects entrepreneurs and small business owners with the already approved lenders. The statewide listing of resources gives those looking for funds to view and match with lenders based on financial needs and focus areas.
No cost technical assistance like bookkeeping and accounting will be available to entrepreneurs and small businesses in preparing for and then accessing money through the Legend Fund and other SSBCI-supported initiatives.
The IEDC anticipates funding $950,000 in technical assistance proposals that are likely to be approved by summer. Applications to be part a technical assistance provider for the Legend Fund are open until March 22.
The State Small Business Credit Initiative was established in 2010 then reauthorized and funded through the American Rescue Plan Act in 2021. The federal funding, alongside private dollars, leverages $10 in follow-on investment for each $1 of SSBCI funds,giving small businesses and entrepreneurs resources to grow.
The IEDC projects by the end of the SSBCI program, $990 million will have been invested into Indiana’s innovation and entrepreneurial ecosystem, according to a 2022 news release about the program.
The state first received $86 million in July 2022 and is eligible to receive another $13 million upon meeting allocation targets for $99 million over 10 years. At least 37% of funding will be distributed to underserved small businesses and entrepreneurs.
Indiana was one of the first 14 states to be approved by the U.S. Department of Treasury for this version of SSBCI.
