The Missouri Technology Corp. and nonprofit financial broker Justine Petersen are planning to allocate $95 million from the U.S. Department of the Treasury through an IgniteMO Small Business Loan Participation Program.
The money comes through the State Small Business Credit Initiative (SSBCI), and IgniteMO is focused on providing access to capital for socially and economically disadvantaged Missourians who own and control businesses in the state.
MTC, a General Assembly-created public-private partnership tasked with cultivating the life sciences and technology industries, was chosen to manage the capital program allocation by Gov. Mike Parson and the Missouri Department of Economic Development, according to a press release. The corporation identified Justine Petersen as a partner to deploy the capital to the targeted population.
IgniteMO-eligible programs are in venture capital, loan participation and guarantee, collateral support and capital access.
IgniteMO, which begins Oct. 1, aims to provide more than $105 million to more than 2,000 small businesses in Missouri over the next decade. Terms are up to 60 months, and the state has asked that a fifth of loans go to recipients outside St. Louis and Kansas City. Justine Petersen has underwriting guidelines in effect for recipients to get a loan.
“We anticipate that the average loan size will be less than $50,000,” Sheri Flanigan-Vazquez, chief operating officer of Justine Petersen, said in an email. “Our initial draw is just under $8 million. IgniteMO is a 50% participation program; therefore, we plan on originating $16 million in loans between now and February 2025 in order to draw the next draw.”
Jack Scatizzi, MTC's executive director, said IgniteMO will complement the corporation’s existing, state-sponsored venture capital program, the Idea Fund, which has awarded more than $15.5 million in SSBCI funding to 50 Missouri companies. The 2021-passed American Rescue Plan Act reauthorized and expanded SSBCI into a nearly $10 billion program.
Both entities have experience handling pandemic-era aid money and working with economically disadvantaged people. Justine Petersen, a community financial institution, helped distribute Paycheck Protection Program funding and ran a program helping low- and moderate-income St. Louis area residents refinance high-interest car loans. Justine Petersen received $6.2 million last year in Treasury Department funding to distribute from the Community Development Financial Institutions Fund Equitable Recovery Program.
“Our history of supporting small businesses without access to traditional capital aligns perfectly with the goals of the SSBCI program. We are eager to leverage our expertise to administer this new loan participation program," Flanigan-Vazquez said in a statement.
The MTC awarded more than $2 million from the SSBCI to eight Missouri startups earlier this year. The corporation said in May that it had provided more than $50 million in equity investments to around 160 companies through its Idea Fund, which received $95 million from the SSBCI in 2022. It also announced in May its Proof of Concept program to fund early-stage entrepreneurs with high growth potential with $25,000 to $50,000 equity investments.
