Guam awarded $58M in grants under federal initiative to back startup boom
By Pacific Island Times News Staff
The U.S. Department of Treasury today announced the approval of $58.6 million in State Small Business Credit Initiative funding for Guam to support local small business financing and investment programs.
The territory will operate three programs: a loan guarantee, collateral support, and an equity/venture capital program, according to the Treasury's announcement.
"The loan guarantee program, allocated over $36 million, provides lenders with the necessary security, in the form of a partial guarantee, to incentivize lenders to make loans to borrowers," the agency said.
The program expands access to capital for underserved communities by using a multi-pronged marketing and partnership strategy with various organizations and lenders in the jurisdiction, the Treasury said.
The collateral support program, allocated $12 million, will provide partner lenders cash collateral in a savings account to support loans to borrowers. The equity/venture capital program, allocated $10 million, will provide seed, early and growth stage equity investment in Guam-based startups.
“This is a historic investment in entrepreneurship, small business growth, and innovation that will help reduce barriers to economic opportunities for underserved communities,” Gov. Lou Leon Guerrero said.
“These latest investments will keep this small business boom going by expanding access to capital and by providing entrepreneurs the resources they need to succeed," the governor added.
Guam's application was among the five state and territorial plans approved today. Also receiving business credit initiative grants are Arkansas, Rhode Island, the U.S. Virgin Islands and Wisconsin, for a combined total of up to $339 million.
“This is a 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,” said Secretary of the Treasury Janet L. Yellen. “These SSBCI funds will promote equitable economic growth across the country.”
President Biden’s American Rescue Plan reauthorized and expanded SSBCI, which was originally established in 2010 and was highly successful in increasing access to capital for small businesses and entrepreneurs.
Data released by the Census Bureau in January showed about 10.5 million new business applications between 2021 and 2022, the strongest two years on record for startups.
"The investments being made through SSBCI are a key part of a federal strategy to keep this small business boom going by expanding access to capital and by providing entrepreneurs with the resources they need to succeed," the Treasury said in a press release.