Today, the State of Louisiana was awarded $113 million to support small business owners and entrepreneurs across the state in partnership with private financial institutions and equity funds, including at least 13 venture capital investors in the Greater New Orleans region. This announcement follows the U.S. Treasury’s approval of the state’s application for funding under the $10 billion State Small Business Credit Initiative.
Funds will be distributed by banks and other lenders participating in SSBCI collateral support, loan guaranty and microloan programs; and by equity funds approved to participate in the SSBCI venture and seed capital programs, which leverage SSBCI funds to invest in high-growth startups in all stages of development. Each entity will develop custom application and fund approval processes, but must work through the Louisiana Economic Development Corporation and adhere to U.S. Treasury guidelines for qualification and deployment of funds.
“Entrepreneurship is a pillar of economic development,” said Michael Hecht, President and CEO of Greater New Orleans, Inc. “This unprecedented infusion of investment capital into Greater New Orleans will help catalyze inclusive entrepreneurship, driving company formation in high-growth, high-wage sectors of the region.”
The award represents an unprecedented amount of new venture capital that will enter our region through the 13 local innovation centers and organizations approved for program participation so far. This funding will fuel the local startup ecosystem for the next decade, providing opportunities to attract additional investments, assist startups with funding challenges, and foster the flywheel of innovation into new exit events. Additionally, universities and hospitals in the region who received awards can rapidly expand commercialization efforts that bring research outcomes into the marketplace.
Companies and support organizations in the Greater New Orleans region who have been approved for Louisiana SSBCI equity fund participation to date are:
- Benson Capital Partners
- Greater New Orleans Development Foundation
- Jefferson Capital Partners
- Lafayette Square Holding
- LSU Health Foundation
- New Orleans BioInnovation Center
- New Orleans Startup Fund
- Ochsner Ventures
- The Hackett Group
- The Idea Village
- Tulane Innovation Institute
U.S. Treasury guidelines prioritize disbursement of funds to Socially and Economically Disadvantaged Individuals (SEDIs), such as women, people of color, military veterans, people with disabilities, people who live in rural zip codes, and more.
“This award of up to $113 million is significant news for our entrepreneurs and small business owners in Louisiana, especially in communities that have historically struggled to attract business capital and investment,” Gov. John Bel Edwards said. “Small businesses have long been the backbone of our economy in Louisiana, and they bore some of the most challenging economic burdens since the onset of the COVID-19 pandemic. This program will put substantial federal funding into capital programs for small businesses and entrepreneurs most in need of support in our state.”
The 2021 American Rescue Act reauthorized an expanded SSBCI, which was originally established in 2010, to increase access to capital and promote entrepreneurship, especially in traditionally underserved communities as they emerge from the pandemic. The program is
expected to catalyze up to $10 of private investment for every $1 of SSBCI capital funding,
providing small business owners critical resources to sustainably grow and thrive.
“This major award of federal dollars will revitalize our SSBCI program and prime the pump for a surge in small business investment across Louisiana, with a special focus on our underserved communities,” LED Secretary Don Pierson said. “LED looks forward to supporting our banks, financial institutions and the networks that grow start-ups and facilitate small businesses operators. This new capital will provide lenders with dedicated funds for targeted disbursement. From loan programs to venture capital investment to technology transfer and innovation research, the opportunities afforded by this SSBCI funding are significant.”
The announcement of Louisiana’s allocation follows a rigorous, year-long application and approval process that required states to create individual SSBCI allocation to support small business growth and entrepreneurship.