The state of Alaska is set to receive up to $59.9 million in federal money to provide funding opportunities for Alaskans in commercial fishing and other sectors, the U.S. Treasury Department revealed on Oct. 11.
The money is part of up to $1 billion in funding approved under the State Small Business Credit Initiative (SSBCI). Alaska is using its funding to help lenders provide new opportunities for Alaskans in commercial fishing, mariculture, manufacturing, tourism and other sectors with capital needs.
Alaska is to operate four programs, including a loan-guarantee plan to which $32 million has been allocated. The program would help ensure capital goes to commercial fishing operations and other kinds of small businesses facing reductions in revenues that make it difficult to meet lenders’ minimum criteria for risk assessments.
Alaska also will run a $15.9 million loan participation program thanks to the federal funding. The program’s focus would be on lowering interest rates and extending loan terms to keep monthly payments low and allow businesses to join in the economic recovery.
The state also has allocated $10 million to its equity/venture capital program to make investments targeting high-growth maritime businesses related to the commercial fishing and mariculture industries, construction or logistics and scalable tourism-related companies.
Alaska allocated another slice of the federal monies, $2 million, to its collateral fund program enabling creditors to lend to higher-risk industries and businesses using State Small Business Credit Initiative funds. The collateral offsets their exposure.
The impact of the programs is expected to be greatest in Alaska’s rural and remote communities that have struggled to attract capital in commercial fishing and other sectors with high upfront costs, according to the Treasury Department.
“This is an historic investment in entrepreneurship, small business growth, and innovation through the American Rescue Plan that will help reduce barriers to capital access for traditionally underserved communities,” Treasury Secretary Janet Yellen said in a statement. “I’m excited to see how these SSBCI funds will promote equitable economic growth.”