State Small Business Credit Initiative

The State Small Business Credit Initiative (SSBCI) is a federally funded program administered in Oregon by Business Oregon. Oregon was approved by the U.S. Treasury in August 2022 to receive $83.5 million in funding through this initiative. This second iteration of SSBCI aims to expand access to capital for small businesses across the state, particularly those owned by socially and economically disadvantaged individuals (SEDI) and very small businesses (VSB). The first version of SSBCI in 2010 successfully allocated $16.7 million through three finance programs. The current program emphasizes equity, inclusion, and innovation through a range of loan and equity programs. SSBCI supports several funding mechanisms, including venture capital investments, royalty and angel loans, loan guarantees, and credit enhancement programs. Specifically, $42 million is designated for innovation-driven equity and debt funding, while $41.5 million supports commercial lending across sectors such as retail, agriculture, and manufacturing. Grants and forgivable loans are prohibited under SSBCI. All funding transactions must meet federal and state requirements, including a minimum 1:1 private match for each investment, and Oregon must achieve a 10:1 leverage overall. The initiative includes multiple programs. The Venture Fund Program partners with local venture capital funds to invest in early-stage, high-growth startups. The Venture Direct Program co-invests in businesses alongside other investors. The Oregon Royalty Fund, comprising the Royalty Loan and Angel Loan Programs, offers patient and revenue-based debt structures. The Credit Enhancement Fund provides loan insurance to expand credit access, and the Community Re-lender Fund supplies capital to local lenders like CDFIs and tribal governments to increase lending capacity. Technical Assistance funding supports organizations offering financial, legal, and accounting guidance to SEDI and VSB entities. Eligibility is broad but includes restrictions: businesses must have fewer than 500 employees and project funding must be under $20 million. Prohibited uses include stock purchases and cash distributions to owners, although ESOP-related acquisitions are allowed under specific conditions. Businesses operating in sectors not aligned with federal law, such as cannabis, are ineligible. TA services are limited to SEDI and VSB firms and must include advisory services, with at least 50% of services delivered directly by the TA provider. Applications for the programs may involve RFQs or RFPs, which are released following legal reviews by the Oregon Department of Justice. For example, RFPs for community re-lenders are expected to open with a 45-day response window. Venture capital applications are accepted on a rolling basis and evaluated on factors including SEDI and VSB inclusion and private match leverage. Contact for the SSBCI program is SSBCI.Info@biz.oregon.gov. Additional information and RFQ opportunities can be found on the Business Oregon SSBCI resource page. Program funding is disbursed in tranches, with Tranche 1 requiring 80% commitment before access to Tranche 2. The entire program runs through at least 2031, with required reporting and federal auditing to ensure compliance. The next major application cycle is expected to open in Fall 2026.

Applicants should ensure match funding is in place and demonstrate strong inclusion strategies for SEDI and VSB groups.