1

U.S. Department of the Treasury

State Small Business Credit Initiative (SSBCI)

Frequently Asked Questions

Updated February 21, 2024

Table of Contents

GENERAL...................................................................................................................................................5

1. What are the upcoming SSBCI Capital Program and Technical Assistance (TA) Grant Program 

deadlines? [03/02/2022, updated 06/22/2022]........................................................................................ 5

2. What is the process for application approval, and when will applications be reviewed? [12/15/2021, 

updated 06/22/2022]............................................................................................................................... 5

3. Removed on 03/02/2022 ........................................................................................................................ 5

4. How may a jurisdiction amend its programs after Treasury’s approval of its application? [12/15/2021, 

updated 06/22/2022]............................................................................................................................... 5

5. When will the SSBCI Technical Assistance Program guidance be published? [12/15/2021, updated 

06/22/2022] ............................................................................................................................................ 6

6. Can a jurisdiction use the same letter of designation for its SSBCI Capital Program application and its 

SSBCI TA Grant Program application? [09/27/2022] ........................................................................... 6

CAPITAL PROGRAM ..............................................................................................................................6

Section III.b, Main Capital Allocation – Tranching and Deployment...................................................6

1. Where can jurisdictions deposit and maintain disbursements of allocated funds under the Capital 

Program? [08/15/2022]...........................................................................................................................6

2. What requirements apply to an entity that implements an SSBCI program if that entity does not 

contract directly with a jurisdiction or its implementing entity? [09/27/2022]......................................7

3. How can participating jurisdictions continue to run their SSBCI programs in advance of a subsequent 

disbursement? [12/04/2023]...................................................................................................................7

Section IV, SEDI-Owned Business Allocations........................................................................................8

1. Must eligible jurisdictions establish separate programs for business enterprises owned and controlled 

by socially and economically disadvantaged individuals (SEDI-owned businesses)? [03/02/2022].....8

2. How did Treasury identify Community Development Financial Institution (CDFI) Investment Areas, 

defined in 12 C.F.R. § 1805.201(b)(3)(ii), for purposes of determining the preliminary allocation 

amounts for the $1.5 billion SEDI allocation and the initial eligible amounts for the $1.0 billion SEDI 

incentive allocation? [03/02/2022].........................................................................................................8

3. How does Treasury identify CDFI Investment Areas for purposes of the “expended for” requirement 

for the $1.5 billion SEDI allocation and for purposes of qualifying for the initial eligible amounts 

under the $1.0 billion SEDI incentive allocation? [03/02/2022, revised 02/21/2024] ...........................8
2

4. What point in time is used for the determination of whether the ownership and control of a business 

qualifies the business as a SEDI-owned business? [03/02/2022]...........................................................9

5. What type of documentation is required to demonstrate that the SSBCI funds have been expended for 

SEDI-owned businesses? [03/02/2022]..................................................................................................9

6. How was an eligible jurisdiction’s initial eligible amount of SEDI incentive funding calculated? 

[03/02/2022]......................................................................................................................................... 10

7. How is an eligible jurisdiction’s SEDI Objective calculated? [03/02/2022]........................................ 10

8. Why is the SEDI Objective important for eligible jurisdictions? [03/02/2022]................................... 10

9. How can an eligible jurisdiction receive some or all of its initial eligible amount of SEDI incentive 

funding, and how is this related to an eligible jurisdiction’s SEDI Objective? [03/02/2022].............. 11

Section VI.d, Approving States for Participation – Tribal Governments............................................ 12

1. For a group of Tribal governments that submit a joint application for SSBCI funding for a 

capital program to be implemented by a non-Tribal entity, can the non-Tribal entity sign and 

implement the Allocation Agreement on behalf of the group of Tribal governments? [06/22/2022].. 12

Section VII.f (applicable to CAPs) and Section VIII.f (applicable to OCSPs) – Lender Assurances: 

Refinancing and New Extensions of Credit – 12 U.S.C. § 5704(e)(7)(A)(ii) .................................. 13

1. Removed on 06/20/2023 ...................................................................................................................... 13

2. How are refinancings reported? [06/20/2023]...................................................................................... 13

Section VIII.a, Approving State OCSPs – In General........................................................................... 13

1. The SSBCI Capital Program Policy Guidelines treat OCSPs involving credit/debt differently from 

equity/venture capital OCSPs, in certain circumstances. How will SSBCI evaluate proposed OCSPs 

where the investment structure has characteristics of both types of OCSPs? [06/22/2022]................. 13

2. Can a jurisdiction make SSBCI-supported investments using a “side car” fund? [06/22/2022].......... 14

Section VIII.c, Approving State OCSPs – 1:1 Financing ...................................................................... 15

1. As a part of the application, eligible jurisdictions must describe how their Other Credit Support 

Programs (OCSPs) will in fact “cause and result in” private financing. How can an eligible 

jurisdiction meet this requirement when it plans to work with venture capital funds? [12/15/2021] .. 15

2. For OCSPs in which the jurisdiction invests in venture capital funds, how is the 1:1 financing 

requirement measured? [12/15/2021]................................................................................................... 15

Section VIII.d, Approving State OCSPs – Lender or Investor Capital at Risk .................................. 16

1. What is the difference between a “lender” and a “debt investor” in SSBCI? [12/15/2021]................. 16

2. Do lenders need to comply with the capital-at-risk requirement if they subsequently transfer the 

ownership or risk of the loan to another entity? [12/15/2021, revised 04/07/2023]............................. 17

3. If a lender hires one or more entities to provide services related to SSBCI-supported small business 

loans on the lender’s behalf, do these entities need to comply with the capital-at-risk requirement? 

[12/15/2021]......................................................................................................................................... 18

Section VIII.f, Approving State OCSPs – Loan/Investment Purpose Requirements and Prohibitions

.............................................................................................................................................................. 18
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1. Can Tribal governments use SSBCI Capital Program funds to provide investments, loans, or other 

credit or equity support to Tribal enterprises? [12/15/2021]................................................................ 18

Section VIII.i, Approving State OCSPs – Additional Guidance Regarding Equity/Venture Capital 

Programs............................................................................................................................................. 18

1. How can jurisdictions that contract with venture capital funds use the federal contribution to cover 

services to portfolio companies? [12/15/2021] .................................................................................... 18

2. What is the definition of a venture capital fund? [12/15/2021, updated 09/27/2022].......................... 19

3. How is the “annual average” calculated for purposes of the limit of 1.71 percent of the federal 

contribution to a venture capital fund that is allowed to cover services to portfolio companies? 

[03/02/2022]......................................................................................................................................... 19

4. In addition to the 1.71 percent allowance for services to portfolio companies, can a jurisdiction also 

use administrative cost funds for its equity/venture capital programs? [03/02/2022].......................... 20

5. What are the benefits of the “Incubation Funding” and “Early-Stage Investment Models”? 

[03/02/2022]......................................................................................................................................... 20

6. How is the Early-Stage Investment Model different than the Incubation Funding Model? [03/02/2022]

20

7. Under the Early-Stage Investment Model and the Incubation Funding Model, the fund or co-investor 

must have a history of providing “incubator-like services.” What are “incubator-like services”? 

[03/02/2022]......................................................................................................................................... 21

8. Is the fund or co-investor under the Incubation Funding or Early-Stage Investment Model, 

respectively, required to provide incubator-like services to startups? [03/02/2022]............................ 21

9. What should jurisdictions consider in structuring the call option’s price and duration under the 

Incubation Funding and Early-Stage Investment Models? [03/02/2022]............................................. 21

10. Is the 1.71 percent allowance for services to portfolio companies in the context of venture capital 

funds available for debt funds? [09/27/2022]....................................................................................... 22

11. Can the 1.71 percent allowance be used to provide services to a small business before the venture 

capital fund invests in any portfolio companies? [09/27/2022]............................................................ 22

12. What documentation standards apply to the 1.71 percent allowance? [09/27/2022] ........................... 23

13. Treasury approved my jurisdiction’s venture capital fund program, but we have changed venture 

capital funds or selected venture capital funds that were not named in our original application. Should 

the jurisdiction notify Treasury of the new venture capital funds selected under the program? 

[01/19/2024]......................................................................................................................................... 23

Section IX.c, Other SSBCI Program Requirements – In-State and Out-of-State Loans and 

Investments ......................................................................................................................................... 25

1. Treasury requires each jurisdiction to use at least 90 percent of its SSBCI Capital Program funding 

for loans, investments, and other credit or equity support for small businesses headquartered in the 

jurisdiction. What types of transactions would qualify in this 90-percent funding category for Tribal 

governments? [12/15/2021].................................................................................................................. 25

Section IX.f, Other SSBCI Program Requirements – Minimum National Customer Protection 

Standards ............................................................................................................................................ 26
4

1. The Capital Program Policy Guidelines state that the interest rate for each SSBCI-supported loan, at 

the time of obligation, may not exceed the National Credit Union Administration’s (NCUA’s) interest 

rate ceiling for loans made by federal credit unions. As of what date is the interest rate cap 

determined? That is, what does “at the time of obligation” mean? [03/02/2022]................................ 26

Section IX.g, Other SSBCI Program Requirements – Disclosure of Terms........................................ 26

1. FAQ incorporated under the Capital Program Policy Guidelines; accordingly, FAQ removed on 

12/04/2023] .......................................................................................................................................... 26

Section XI. Administrative Costs............................................................................................................. 26

1. How is Program Income calculated? [08/16/2023].............................................................................. 26

2. Can Program Income be used to pay for SSBCI administrative costs? [08/16/2023].......................... 27

TECHNICAL ASSISTANCE (TA) GRANT PROGRAM.................................................................... 28

Section III. Eligible Recipients, Beneficiaries, and TA Providers........................................................ 28

1. Can a state participating in the TA Grant Program make a subaward to a political subdivision of that 

state? [09/21/2022]............................................................................................................................... 28

2. How does Treasury define a “legal, accounting, or financial advisory firm” for purposes of the TA 

Grant Program? [09/21/2022]............................................................................................................... 28

3. Can a Tribal-affiliated entity or a non-Tribal entity apply for a TA grant, sign a TA Grant Agreement, 

and implement the grant on behalf of a group of Tribal governments? [05/09/2023].......................... 29

4. Does a Tribal government need to designate a specific agency, department, or subdivision as the 

recipient of its TA grant? [09/28/2023]................................................................................................ 30

Section V. TA Grant Program Application............................................................................................ 30

1. How should Tribal government TA Grant Program applications address the connection to economic 

benefits requirement in the TA Grant Program Guidelines? [07/21/2023] .......................................... 30

Section VIII. Award Administration Information................................................................................. 31

1. How will Treasury disburse TA Grant Program funds? Will fixed amount award procedures apply to 

TA Grant Program awards? [07/25/2022, updated 12/08/2022] .......................................................... 31
5

Note: The date listed after each question indicates the date such frequently asked question 

(FAQ) was added or most recently amended.

GENERAL

1. What are the upcoming SSBCI Capital Program and Technical Assistance (TA) Grant 

Program deadlines? [03/02/2022, updated 06/22/2022] 

• September 1, 2022 at 11:59 pm Eastern Time: Deadline for Tribal governments to initiate 

and submit their complete SSBCI capital application. To participate in the SSBCI program, 

Tribal governments were required to submit a Notice of Intent (NOI) to Treasury by 

December 11, 2021. A list of Tribal governments that submitted an NOI by this deadline can 

be found at https://home.treasury.gov/system/files/136/Tribal-Government-NOISubmissions.pdf. 

• September 1, 2022 at 11:59 pm Eastern Time: Deadline for all jurisdictions to submit their 

TA Grant Program applications. The TA Grant Program application template can be found at

https://home.treasury.gov/policy-issues/small-business-programs/state-small-business-creditinitiative-ssbci. 

2. What is the process for application approval, and when will applications be reviewed? 

[12/15/2021, updated 06/22/2022]

An application for SSBCI Capital Program funding is not a competitive award process. Treasury 

will approve applications that satisfy the requirements under the SSBCI statute, Capital Program 

Policy Guidelines, and all other SSBCI regulations and guidance, including FAQs. To expedite 

processing, applicants should make every effort to ensure that their applications include all 

applicable supporting documentation. Treasury will review complete applications in the order in 

which they are received. 

3. Removed on 03/02/2022.

4. How may a jurisdiction amend its programs after Treasury’s approval of its 

application? [12/15/2021, updated 06/22/2022]

For the SSBCI Capital Program, after a jurisdiction’s application is approved, the jurisdiction is 

permitted to submit a request to modify its programming due to a change in the condition 

(financial or otherwise) or operations of the jurisdiction or a desire to create new programming 

(modification request). Approval from Treasury in the form of a written amendment to the 

Allocation Agreement will be required before any such modification may be implemented. A 

modification request is not considered to be approved until both the jurisdiction’s authorized 

representative and Treasury have executed an amendment to the Allocation Agreement (which 

will be prepared by Treasury). 
6

5. When will the SSBCI Technical Assistance Program guidance be published? 

[12/15/2021, updated 06/22/2022]

The SSBCI TA Grant Program Guidelines for the portion of technical assistance funding that 

will be available directly to eligible jurisdictions were published on April 28, 2022.

The TA Grant Program Guidelines are available on the SSBCI website at 

https://home.treasury.gov/system/files/136/SSBCI-Technical-Assistance-Guidelines-April2022.pdf. Treasury intends to publish FAQs for the TA Grant Program. 

6. Can a jurisdiction use the same letter of designation for its SSBCI Capital Program 

application and its SSBCI TA Grant Program application? [09/27/2022]

Yes. Both designations can be in one letter of designation if the letter makes it clear that 

(1) authority is being designated for both the SSBCI Capital Program and the SSBCI TA Grant 

Program and (2) all requirements for each designation (as described in the respective 

applications) are met.

CAPITAL PROGRAM

The following FAQs provide additional guidance regarding the SSBCI Capital Program Policy 

Guidelines published on November 10, 2021. The questions are categorized by the relevant 

section of the Capital Program Policy Guidelines. 

Section III.b, Main Capital Allocation – Tranching and Deployment

1. Where can jurisdictions deposit and maintain disbursements of allocated funds under 

the Capital Program? [08/15/2022]

Section 2.3 (“Cash Depositories”) of the Allocation Agreement requires that jurisdictions deposit 

and maintain disbursements of allocated funds in U.S. government-insured interest-bearing 

accounts whenever possible. 

Under this provision, jurisdictions may invest amounts that would exceed applicable deposit 

insurance limits in cash and cash equivalents. Cash equivalents are short-term, highly liquid 

investments that are readily convertible to known amounts of cash and have original maturities 

of three months or less, such as Treasury bills, commercial paper, and certificates of deposit. 

In deciding how to maintain allocated funds, jurisdictions should also consider: (1) the 

requirement that the jurisdiction be fully positioned to act on providing the kind of credit or 

equity support that the jurisdiction’s approved program was established to provide 

(see section 3.4 of the Allocation Agreement); and (2) that interest earned on SSBCI funds not 

invested or lent to a business counts as program income (see section 3.3 of the 

Allocation Agreement and section III of the Capital Program Reporting Guidance).
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2. What requirements apply to an entity that implements an SSBCI program if that entity 

does not contract directly with a jurisdiction or its implementing entity? [09/27/2022]

Under 12 U.S.C. § 5703(c), a jurisdiction may be approved for participation in the SSBCI 

program if it “has contractual arrangements for the implementation and administration of [its] 

program with . . . an authorized agent of, or entity supervised by, the [jurisdiction], including 

for-profit and not-for-profit entities.” 

Section 3.1 of the Allocation Agreement requires a participating jurisdiction to cause any entities 

with which it designates or contracts to implement approved programs, including its 

implementing entity and contracted entities, to comply with the SSBCI statute and Treasury’s 

SSBCI regulations, guidance, and other requirements.

When a jurisdiction designates an entity to implement an SSBCI capital program, Treasury 

encourages the jurisdiction or its implementing entity to contract directly with that entity 

whenever feasible. However, a jurisdiction may indirectly contract with an entity to implement 

SSBCI capital programs; for example, some states may have legal requirements for the 

implementing entity to contract with a third party, which then subcontracts with the entity 

designated to implement an SSBCI capital program. In such cases, section 3.1 of the 

Allocation Agreement requires the jurisdiction to cause the subcontracted entity to comply with 

the SSBCI statute and Treasury’s SSBCI regulations, guidance, and other requirements. 

Jurisdictions should report the activity of the subcontracted entity as if it were a 

“contracted entity” under the Capital Program Report Guidance.

3. How can participating jurisdictions continue to run their SSBCI programs in advance 

of a subsequent disbursement? [12/04/2023]

When a participating jurisdiction requests its second and third tranches of SSBCI funding, 

Treasury will review the certification provided by the participating jurisdiction and perform 

targeted compliance testing on certain supporting documentation related to the jurisdiction’s use 

of previously disbursed SSBCI funds. Treasury will not disburse second and third tranches of 

SSBCI funding until it completes this process. While that review is pending, participating 

jurisdictions may continue to run their SSBCI programs using funds previously disbursed by 

Treasury. To promote continuity in funding, Treasury strongly encourages jurisdictions to 

contact Treasury before they approach the 80 percent threshold to prepare for the disbursement 

process and to enable the following tranche to be disbursed before previously disbursed funds are 

exhausted. 

If a jurisdiction exhausts its SSBCI funds previously disbursed by Treasury before receiving its 

next tranche, it may continue to make loan and investment commitments under its 

SSBCI programs to eligible small businesses. Jurisdictions should include a statement in the 

documentation for such transactions, which may include commitment letters, that funding for the 

transaction is contingent upon the jurisdiction receiving additional funding from Treasury in 

accordance with applicable law. All commitments made by a jurisdiction that are contingent on 
8

the receipt of additional funding from Treasury are made at the jurisdiction’s and the business’s 

risk, and Treasury has no obligation to provide funds to satisfy such commitments before 

Treasury has approved the subsequent disbursement to the jurisdiction. 

In contrast, beginning as of the date of this FAQ, jurisdictions are not permitted to close and fund 

SSBCI transactions with non-SSBCI funds (e.g., using other state funds) and then replace or 

reimburse those non-SSBCI funds with SSBCI Allocated Funds after Treasury approves the 

jurisdiction’s request for a subsequent disbursement.

Section IV, SEDI-Owned Business Allocations

1. Must eligible jurisdictions establish separate programs for business enterprises owned 

and controlled by socially and economically disadvantaged individuals (SEDI-owned 

businesses)? [03/02/2022]

Eligible jurisdictions are not required to establish separate programs for SEDI-owned businesses. 

However, eligible jurisdictions must maintain records of the total amount of their SSBCI funds 

expended for SEDI-owned businesses.

2. How did Treasury identify Community Development Financial Institution (CDFI) 

Investment Areas, defined in 12 C.F.R. § 1805.201(b)(3)(ii), for purposes of determining 

the preliminary allocation amounts for the $1.5 billion SEDI allocation and the initial 

eligible amounts for the $1.0 billion SEDI incentive allocation? [03/02/2022]

To determine the amounts in the table with preliminary allocation amounts and initial eligible 

amounts that Treasury published on its website,1 Treasury generally used the CDFI Fund’s list of 

Investment Areas that was available in November 2021.2 With respect to American Samoa, 

Guam, the Northern Mariana Islands, and the U.S. Virgin Islands, Treasury has determined that 

these territories in their entirety constitute CDFI Investment Areas. 

3. How does Treasury identify CDFI Investment Areas for purposes of the “expended for” 

requirement for the $1.5 billion SEDI allocation and for purposes of qualifying for the 

initial eligible amounts under the $1.0 billion SEDI incentive allocation? [03/02/2022, 

updated 02/21/2024]

For purposes of the “expended for” requirement for the $1.5 billion SEDI allocation and for 

purposes of qualifying for the initial eligible amounts under the $1.0 billion SEDI incentive 

allocation, Treasury will use the list of CDFI Investment Areas identified by the CDFI Fund. For 

each transaction, whether the relevant location is in a CDFI Investment Area must be determined 

immediately before the consummation of the relevant loan, investment, or other credit or equity 

support-related transaction, at the same time that ownership and control is assessed. A map of 

1 The table can be found at https://home.treasury.gov/system/files/256/Updated-Preliminary-Allocations-Table-Nov2021.pdf. 

2 The CDFI Fund’s list of investment areas can be found at https://www.cdfifund.gov/documents/geographicreports.
9

CDFI Investment Areas for purposes of SSBCI is available at https://home.treasury.gov/policyissues/small-business-programs/state-small-business-credit-initiative-ssbci/2021-ssbci/cdfi-fundinvestment-areas.

To provide advance notice and appropriate flexibility to jurisdictions, if the CDFI Fund’s list is 

updated during a given calendar year, then during that calendar year jurisdictions may assess 

transactions using either the prior list or the updated list of CDFI Investment Areas. For 

example, the CDFI Fund published an updated list of Investment Areas (labeled “2020” in the 

CDFI Public Viewer) on January 6, 2023. From January 6, 2023 through December 31, 2023, 

jurisdictions can document a transaction as supporting a SEDI-owned business using either this 

updated list or the previously issued list (labeled the “2015” list in the CDFI Public Viewer). For 

transactions consummated on or after January 1, 2024, only the updated list may be used to 

document SEDI-owned business transactions.

Further, Treasury has determined that American Samoa, Guam, the Northern Mariana Islands, 

and the U.S. Virgin Islands in their entirety constitute CDFI Investment Areas for purposes of 

the SSBCI, because each of these territories has a poverty rate of at least 20 percent. 

4. What point in time is used for the determination of whether the ownership and control 

of a business qualifies the business as a SEDI-owned business? [03/02/2022]

For each business that receives a loan, investment, or other credit or equity support under the 

SSBCI, the determination of whether a business is a SEDI-owned business must be based on the 

ownership and control of the business immediately before the consummation of such transaction.

5. What type of documentation is required to demonstrate that the SSBCI funds have 

been expended for SEDI-owned businesses? [03/02/2022]

SSBCI funds count toward fulfilling the “expended for” requirement for the $1.5 billion 

SEDI allocation and qualifying for funding under the $1.0 billion SEDI incentive allocation if 

the SSBCI funds have been expended for loans, investments, or other credit or equity support to 

any of the four groups of businesses set forth in Section IV.a of the Capital Program Policy 

Guidelines.

Certification is required with regard to groups (1) to (3). In the Capital Program Policy 

Guidelines, Treasury stated that group (3) is intended to cover a business taking out a loan or 

investment to build a location in a CDFI Investment Area in the future and that a jurisdiction 

may reasonably identify businesses located in CDFI Investment Areas in group (4) based on 

businesses’ addresses from the relevant loan, investment, and credit or equity support 

applications without additional certification. For group (3), Treasury now expands that group to 

include businesses that take out a loan or make an investment to open or operate a location in a 

CDFI Investment Area in the future.

For groups (1) to (3), eligible jurisdictions must provide businesses with a form of certification 

intended to determine the SEDI-owned business status. The certification should be signed by an 
10

authorized representative of the business. Businesses must be permitted to identify all the 

categories in groups (1) to (3) that apply, including all of the subcategories in group (1) that 

apply. For groups (2) and (3), the certification form must include the address(es) of the 

residence(s) or location(s) located in CDFI Investment Areas. Treasury will provide a sample 

certification form that jurisdictions may use for this purpose. For group (1), Treasury will not 

require verification or documentation other than the self-certification. 

6. How was an eligible jurisdiction’s initial eligible amount of SEDI incentive funding 

calculated? [03/02/2022]

As described in Section IV.b of the Capital Program Policy Guidelines, the total of all initial 

eligible amounts is $800 million. Of this amount, $59 million is available to Tribal governments, 

in proportion to Tribal governments’ main capital allocation as a percentage of the main capital 

allocation for states, the District of Columbia, territories, and Tribal governments. Each Tribal 

government’s initial eligible amount was calculated as described in the Allocation to Tribal 

Governments, available at https://home.treasury.gov/system/files/256/Updated-TribalMethodology-document-Nov-2021.pdf. 

For other eligible jurisdictions, each jurisdiction’s initial eligible amount was calculated as the 

remaining $741 million multiplied by the sum of the jurisdiction’s population residing in 

CDFI Investment Areas3 divided by the total population residing in CDFI Investment Areas in all 

eligible jurisdictions, excluding Tribal governments. These initial eligible amounts are available 

at https://home.treasury.gov/system/files/256/Updated-Preliminary-Allocations-Table-Nov-2021.pdf.

7. How is an eligible jurisdiction’s SEDI Objective calculated? [03/02/2022]

For states, the District of Columbia, and territories, the SEDI Objective equals the percentage of 

the population of the eligible jurisdiction that are residents in CDFI Investment Areas, as defined 

in 12 C.F.R. § 1805.201(b)(3)(ii), divided by the total population of the jurisdiction. These 

jurisdictions’ SEDI Objectives are posted on Treasury’s website at 

https://home.treasury.gov/system/files/256/SEDI-Objectives-03-02-22.pdf. For Tribal governments, the 

SEDI Objective is 100 percent. 

8. Why is the SEDI Objective important for eligible jurisdictions? [03/02/2022]

The SEDI Objective establishes a target percentage of the capital allocations under 12 U.S.C. 

§ 5702 that an eligible jurisdiction should strive to deploy to meet the needs of SEDI-owned 

businesses in the jurisdiction. It provides a benchmark for achieving robust support for deploying 

capital to meet the needs of SEDI-owned businesses.

3 For an explanation of how Treasury identifies CDFI Investment Areas, see FAQ 2 above in this section.
11

9. How can an eligible jurisdiction receive some or all of its initial eligible amount of 

SEDI incentive funding, and how is this related to an eligible jurisdiction’s 

SEDI Objective? [03/02/2022]

As described in Section IV.b of the Capital Program Policy Guidelines, for an eligible 

jurisdiction to receive part or all of its initial eligible amount of SEDI incentive funding for each 

of the second and third tranches of main capital, the jurisdiction must certify to Treasury that it 

has deployed 80 percent of its prior tranche of SSBCI funds. Treasury will then determine the 

eligible jurisdiction’s success in meeting its SEDI Objective with a multi-step calculation. 

First, Treasury will calculate the percentage of funds the jurisdiction has expended (not 

transferred or obligated) for SEDI-owned businesses since the jurisdiction’s previous 

disbursement of capital. We refer to this percentage as the “percentage of funds expended for 

SEDI-owned businesses.” 

Treasury will then measure the percentage of the jurisdiction’s SEDI Objective that the 

jurisdiction has achieved. That calculation is as follows:

SEDI Objective Achieved =

(Percentage of funds expended for SEDI-owned businesses)

(SEDI Objective )

Finally, Treasury will use the calculated SEDI Objective Achieved to calculate the jurisdiction’s 

“SEDI Incentive Disbursement Amount” as follows: 

SEDI Incentive Disbursement Amount =

SEDI Objective Achieved ∗ (

initial eligible amount

2

)

Following is an example of how the second tranche of an eligible jurisdiction’s SEDI Incentive 

Disbursement Amount would be calculated. Assume the eligible jurisdiction has an initial 

eligible amount of SEDI incentive funding of $22 million and a SEDI Objective of 40 percent. 

At the time of the second disbursement, $11 million of the initial eligible amount (half of 

$22 million) is available if the jurisdiction meets its target by expending 40 percent of its funds 

for SEDI-owned businesses. Assume the jurisdiction expended $10 million of its first tranche of 

its total capital allocation, of which $3 million (30 percent) was expended for SEDI-owned 

businesses. Thus, the SEDI Objective Achieved is equal to 30 percent divided by 40 percent, or 

75 percent. The jurisdiction would then receive a SEDI Incentive Disbursement Amount of 

$8.25 million (75 percent of $11,000,000).

Combining all these steps, the calculation is as follows:

SEDI Incentive Disbursement Amount =

(

30%

40%

) ∗ (

$22,000,000.00

2

) = .75 * $11,000,000 = $8,250,000
12

Section VI.d, Approving States for Participation – Tribal Governments 

1. For a group of Tribal governments that submit a joint application for SSBCI funding 

for a capital program to be implemented by a non-Tribal entity, can the non-Tribal 

entity sign and implement the Allocation Agreement on behalf of the group of Tribal 

governments? [06/22/2022]

The SSBCI statute provides that a “State” may participate in the SSBCI. The statute defines 

“State” to include “a Tribal government, or a group of Tribal governments that jointly apply for 

an allocation” (12 U.S.C. § 5701(10)) and permits Tribal governments to apply jointly 

(12 U.S.C. § 5702(b)(2)(C)). Section VI.d of the Capital Program Policy Guidelines provides 

general instructions on how Tribal governments may apply jointly. 

As described in the Guidelines, Tribal governments may apply jointly through an organization or 

other Tribal government representative if each Tribal government applying jointly authorizes the 

organization or other Tribal government representative to represent the Tribal government for 

purposes of SSBCI. The Guidelines and Section 5.1 of the capital program application provide 

additional information on requirements for joint applications. 

If a joint application is approved, a non-Tribal entity that has authority to act on behalf of each of 

the Tribal governments that are jointly applying may sign an Allocation Agreement on behalf of 

that group of Tribal governments. However, consistent with the statutory requirement that the 

participating entity is the “group of Tribal governments” – and not a third party –the group of 

Tribal governments is considered the “Participating Jurisdiction” as that term is used in the 

Allocation Agreement. 

Article V of the Allocation Agreement sets out Treasury’s remedies for events of default under 

the Allocation Agreement. Section 5.6 of the Allocation Agreement and Section XII of the 

Guidelines describe the process for un-enrollment of transactions for noncompliant use of funds. 

Treasury encourages Tribal governments to consider these potential remedies and circumstances 

as they establish terms under agreements with a non-Tribal entity responsible for implementing 

an SSBCI capital program. Tribal governments may wish to clearly specify in their agreements 

with the non-Tribal entity what happens in the event of any of the situations contemplated by 

Article V of the Allocation Agreement or Section XII of the Guidelines.
13

If Tribal governments apply jointly using a structure other than designating a non-Tribal entity as 

their joint implementing entity, Treasury will evaluate those applications based on their structure 

and may issue additional guidance. Tribal governments considering other structures are 

encouraged to contact Treasury before submitting an application to discuss their proposed 

models.

Section VII.f (applicable to CAPs) and Section VIII.f (applicable to OCSPs) – Lender 

Assurances: Refinancing and New Extensions of Credit – 12 U.S.C. § 5704(e)(7)(A)(ii)

1. Removed on 06/20/2023

2. How are refinancings reported? [06/20/2023]

Table 7 of the Capital Program Reporting Guidance includes two data elements that allow for 

reporting on the eligible business purpose of a loan or investment: Primary Purpose of the Loan 

or Investment and Secondary Purpose of the Loan or Investment. Transactions where a new 

lender is refinancing a loan made by another non-affiliated lender should be reported as follows: 

• For the data element “Primary Purpose of the Loan or Investment,” the primary 

underlying eligible business purpose for the funding should be reported (e.g., marketing, 

market research, and commercialization expenses; purchase existing building, etc.). 

Because the eligible business purpose of the new loan is generally determined by the 

purpose of the underlying funding being refinanced, the new lender should make 

reasonable efforts to determine the eligible business purpose for the underlying funding.

3. For the data element “Secondary Purpose of the Loan or Investment,” the option 

“Refinance outstanding debt” should be selected. While refinancing outstanding debt is 

not in itself an eligible business purpose, this reporting helps Treasury to track 

refinancing transactions.

Section VIII.a, Approving State OCSPs – In General

1. The SSBCI Capital Program Policy Guidelines treat OCSPs involving credit/debt 

differently from equity/venture capital OCSPs, in certain circumstances. How will 

SSBCI evaluate proposed OCSPs where the investment structure has characteristics of 

both types of OCSPs? [06/22/2022]

Following is a description of how Treasury will apply the SSBCI Capital Program Policy 

Guidelines to two types of investments that have characteristics of OCSPs involving credit/debt 

and equity/venture capital OCSPs. If jurisdictions propose programs with other characteristics, 

Treasury intends to evaluate those programs based on their structure and may provide further 

guidance.

OCSPs Using Certain Convertible Debt Instruments

Certain proposed SSBCI programs may seek to use SSBCI funds to make investments in 

businesses using convertible debt instruments that automatically convert into the issuer’s capital 
14

stock upon the occurrence of the issuer’s next priced financing. Consistent with footnote 34 of 

the Capital Program Policy Guidelines, Treasury intends to evaluate programs that use these 

instruments under the equity/venture capital OCSP standards in the Guidelines. For reporting 

purposes, these investments should be treated as equity instruments (see the “convertible debt” 

and “convertible note” data elements in Table 9 of the SSBCI Capital Program Reporting 

Guidance). 

Debt/Equity Hybrid OCSPs

Certain proposed SSBCI programs may seek to use SSBCI funds to provide debt financing to a 

small business or venture capital fund in a manner that satisfies two characteristics:

• The SSBCI-supported investment is made by a jurisdiction or jurisdiction-affiliated 

entity, which is an entity governed by the jurisdiction, and occurs alongside new private 

capital in the form of an equity investment. 

• The SSBCI-supported investment is structured as a debt instrument that has equity-like 

characteristics (e.g., profit sharing, interest contingent on revenues). 

Treasury refers to programs that meet all of the above characteristics as “debt/equity hybrid 

OCSPs.” Treasury intends to evaluate these programs under the equity/venture capital OCSP 

standards in the Capital Program Policy Guidelines, with the exception of the standard for lender 

or investor capital at risk (Section VIII.d of the Guidelines). The structure of debt/equity hybrid 

OCSPs is meaningfully different from the traditional case where an SSBCI investment takes the 

form of an equity investment and therefore lacks the protections generally associated with a debt 

instrument, such as rights to scheduled payments and seniority in cash flow rights. Thus, with 

respect to the lender or investor capital at risk requirement, the standard applicable to debt 

investors that originate loans will be applicable to a debt/equity hybrid OCSP. For debt/equity 

hybrid OCSPs, the 1:1 financing requirement described in the Capital Program Policy Guidelines 

is met at the transaction level if the loan is made directly to a small business, or is met at the fund 

level if the loan is made to a venture capital fund. 

For reporting purposes, debt/equity hybrid OCSPs should be treated as equity programs and 

should be classified as “Hybrid – other support programs” in Table 3 of the Capital Program 

Reporting Guidance.

2. Can a jurisdiction make SSBCI-supported investments using a “side car” fund?

[06/22/2022]

A side car fund is a fund organized to allow a jurisdiction to participate in the investments of a 

venture capital fund (the “main fund”), while enabling the jurisdiction not to participate in 

certain investments of the main fund that may be prohibited by applicable law or SSBCI program 

requirements. A side car fund may qualify for SSBCI-supported investment under the Capital 

Program Policy Guidelines to the same extent as an investment in a main fund if it satisfies the 

conditions described below, which are intended to ensure that the structure of the investment in 

the side car is consistent with the main fund in material respects relevant to the SSBCI program 

requirements. 
15

The side car fund terms should be governed by a written agreement between the SSBCI investor 

and the general partner of the main fund. The investment must be on substantially similar 

economic and governance terms as the investments by limited partners in the main fund, except 

for deviations that are required to address SSBCI program requirements or other legal 

requirements (but not to achieve a more advantageous economic arrangement for the general 

partner, a limited partner, or the SSBCI investor). 

Except for deviations required to address SSBCI program requirements or other legal 

requirements, the main fund and the side car fund must jointly participate in each portfolio 

company investment and on substantially similar terms in proportion to their respective amounts 

of committed capital. The side car fund must not sell distribute, or otherwise transfer portfolio 

company securities unless the main fund is engaging or has engaged in a proportionate sale, 

distribution, or transfer of corresponding securities on substantially similar terms.

If a side car fund complies with these terms, the capital commitments made by the investors in 

the side car should be treated the same as if they were made in the main fund, and the OCSP 

1:1 financing ratio described in Section VIII.c of the Capital Program Policy Guidelines will be 

calculated as if the commitments were made in the main fund.

Section VIII.c, Approving State OCSPs – 1:1 Financing

1. As a part of the application, eligible jurisdictions must describe how their Other Credit 

Support Programs (OCSPs) will in fact “cause and result in” private financing. How 

can an eligible jurisdiction meet this requirement when it plans to work with venture 

capital funds? [12/15/2021]

As required by 12 U.S.C. § 5705(c)(1), each OCSP must “demonstrate that, at a minimum, $1 of 

public investment by the [jurisdiction’s] program will cause and result in $1 of new 

private credit.” Each eligible jurisdiction must describe how their OCSPs will “cause and result 

in” private financing in the SSBCI Capital Program application. For an eligible jurisdiction that 

plans to work with a venture capital fund, the jurisdiction might, for example, specify that the 

OCSP meets the requirement because the jurisdiction’s participation in the fund serves as an 

anchor investment and thus sends a strong signal regarding the merits and risk profile of the fund 

that encourages other investors to invest in the fund. The jurisdiction might also specify, for 

instance, that the OCSP has a policy that any contract with a venture capital fund will ensure that 

the SSBCI investment is catalytic to private financing, based on the fund’s age, size, or 

experience. An example of a situation where the SSBCI investment might not be catalytic is if it 

occurs after the venture capital fund’s initial close; if this is the case, then the jurisdiction’s 

explanation for “cause and result” in the application may address this circumstance. 

2. For OCSPs in which the jurisdiction invests in venture capital funds, how is the 

1:1 financing requirement measured? [12/15/2021]

The OCSP 1:1 financing requirement must be met at the venture capital fund level. Specifically, 

private investment in the specific fund must be equal to or greater than the SSBCI investment in 
16

that fund. The private investment should constitute “private financing,” as defined in the 

Capital Program Policy Guidelines in Section VIII.c on 1:1 financing.

Section VIII.d, Approving State OCSPs – Lender or Investor Capital at Risk

1. What is the difference between a “lender” and a “debt investor” in SSBCI? 

[12/15/2021]

An entity can be a lender or debt investor depending on whether the risk of the loan transactions 

is borne on a transaction-by-transaction basis or in a pooled manner. 

Lenders are entities that bear the risk of loan transactions on a transaction-by-transaction basis. 

Under SSBCI capital-at-risk guidelines, lenders must bear 20 percent or more of the risk of loss 

in any loan transaction and must retain at least 5 percent of the risk of loss of the transaction if 

they transfer the ownership or risk of the lending transactions.

Examples of lenders include, but are not limited to:

• An entity, such as a financial institution, that originates a loan that is:

o supported by an SSBCI guarantee fund,

o supported by SSBCI participation in the loan, or

o supported by SSBCI collateral support or other credit enhancement,

for which the entity bears 20 percent or more of the risk of loss of that transaction. 

For instance, consider a financial institution that makes a $100 loan, of which the 

SSBCI program purchases a $20 participation with no seniority rights. After several 

years, the loan defaults, and total losses on the loan are $30, after accounting for 

amounts already repaid and any recoveries. In this scenario, the SSBCI funds would 

absorb $6 in losses, and the financial institution would absorb $24. This financial 

institution would be a lender under SSBCI capital-at-risk guidelines because the 

financial institution bore at least 20 percent of the risk of loss. As another example, 

consider a financial institution that makes a $100 loan, of which the SSBCI program 

purchases a $20 participation that is subordinate to the financial institution’s interest. 

After several years, the loan defaults, and total losses on the loan are $30. In this case, 

the SSBCI funds would absorb the first $20 in losses, because it is subordinate, and 

the lender would absorb the remaining $10. This financial institution would also be a 

lender under SSBCI capital-at-risk guidelines because the financial institution bore at 

least 20 percent of the risk of loss; if the loan was a total loss (i.e., a loss of $100), 

then the financial institution would have absorbed more than 20 percent ($20) in 

losses.

• An entity that pools capital from the SSBCI investor and capital from private investors 

(e.g., loan funds) to make loans, but only if the pooling of capital does not result in the 

pooling of the risk of the loan transactions. Rather, the contract governing payments to 

the SSBCI investor and private investors must specify that loss is borne on a 

transaction-by-transaction basis. For instance, consider a venture debt fund that makes 

12 loans of $100 each. Rather than specifying terms for payment to the fund’s private 

investors based on the pool of losses, the contract specifies that each private investor 
17

bears the private investor’s pro rata share of the 20 percent of the loss for each of the 

12 loans and prohibits compensation for losses from future repayments. Assume that 

there are losses on 3 of the 12 loans, with losses of $100, $50, and $80, respectively. In 

this case, each private investor would bear its pro rata share of 20 percent of the first loss 

(i.e., $20), 20 percent of the second loss (i.e., $10), and 20 percent of the third loss 

(i.e., $16). 

In contrast, debt investors are entities that bear the risk of loan transactions in a pooled manner. 

Under the SSBCI capital-at-risk guidelines, for debt investors that originate loans, the capital 

from private investors must be pari passu with, or junior to, the SSBCI capital in cash flow 

rights up to the repayment of the SSBCI investment. For debt investors that do not originate 

loans, the capital from private investors in the same risk layer as the SSBCI capital must be 

pari passu with, or junior to, the SSBCI investment in cash flow rights.

One example of a debt investor that originates loans is a loan fund originating loans, where the 

SSBCI investor and private investors participate in the fund and bear the risk of loan transactions 

on a pooled basis rather than on a transaction-by-transaction basis. In this case, the loan fund 

may distribute cash flow to its investors in a manner that is not based on losses related to each 

individual loan.

One example of a debt investor that does not originate loans is a special purpose vehicle (SPV) 

that securitizes loans obtained from an originating lender, where the SPV packages the loans into 

asset-backed securities in which an SSBCI investor and private investors invest. In this scenario, 

the investors bear the risk of loan transactions on a pooled basis, not based on losses related to 

individual loans held by the SPV. 

2. Do lenders need to comply with the capital-at-risk requirement if they subsequently 

transfer the ownership or risk of the loan to another entity? [12/15/2021, revised 

04/07/2023]

Lenders may transfer the ownership or risk of a loan to another entity, such as a debt investor. 

However, lenders must bear 20 percent or more of the risk of loss in each loan at origination and 

retain at least 5 percent of the risk of loss of each loan after any transfer. If a lender transfers the 

ownership or risk of a loan, the subsequent entity must generally comply with the capital-at-risk 

requirement. As explained in Section VIII.d of the Guidelines, to the extent that an OCSP is 

structured such that a lender transfers a portion of SSBCI-compliant loans to a special-purpose 

vehicle (SPV) or other pooled entity funded by SSBCI capital and private capital, the OCSP may 

satisfy the private capital at risk requirement by showing that the originating lender will retain at 

least 20 percent of the risk of loss of each loan at a transaction level, regardless of the structure 

of the SPV or other pooled entity. Otherwise, the OCSP will be assessed based on the existing 

standards applicable to debt investors that do not originate loans, as described above.

For example, consider a community development financial institution (CDFI) that makes 

120 loans and sells the loans to an SPV while maintaining 5 percent of the risk of loss of each of 

the 120 loans. The SPV issues two tranches of interests: a junior tranche held by both an SSBCI 

investor and private-capital investors in equal amounts and on a pasri passu basis within this 
18

tranche, and a senior tranche held only by private-capital investors. In this example, both the 

CDFI and the SPV are complying with the capital-at-risk requirement.

3. If a lender hires one or more entities to provide services related to SSBCI-supported 

small business loans on the lender’s behalf, do these entities need to comply with the 

capital-at-risk requirement? [12/15/2021]

A lender may hire or contract with one or more entities, such as a community development 

financial institution (CDFI), to provide services, such as assisting a small business in applying 

for SSBCI-supported loans or servicing such loans, on behalf of the lender. In this scenario, if 

the hired entity acts on the lender’s behalf and the lender approves the loan and abides by the 

capital-at-risk requirement, then the hired entity is not considered a lender for purposes of this 

capital-at-risk requirement. However, if an entity (e.g., a CDFI) is acting separately and making 

and approving loans, then it must abide by the capital-at-risk requirements.

Section VIII.f, Approving State OCSPs – Loan/Investment Purpose Requirements and 

Prohibitions

1. Can Tribal governments use SSBCI Capital Program funds to provide investments, 

loans, or other credit or equity support to Tribal enterprises? [12/15/2021]

For purposes of the SSBCI, a “Tribal enterprise” is an entity: (1) that is wholly owned by one or 

more Tribal governments, or by a corporation that is wholly owned by one or more Tribal 

governments; or (2) that is owned in part by one or more Tribal governments, or by a corporation 

that is wholly owned by one or more Tribal governments, if all other owners are either 

United States citizens or small business concerns. 

Tribal enterprises may use SSBCI Capital Program funds to provide investments, loans, or other 

credit or equity support to other Tribal enterprises if these transactions comply with the SSBCI 

statute, the Capital Program Policy Guidelines, all other SSBCI regulations and guidance, and 

the Tribe’s own conflict of interest policy.

Section VIII.i, Approving State OCSPs – Additional Guidance Regarding Equity/Venture 

Capital Programs

1. How can jurisdictions that contract with venture capital funds use the federal 

contribution to cover services to portfolio companies? [12/15/2021]

Venture capital funds offer a variety of services to their portfolio companies (i.e., the potential 

SSBCI investees). These services can include, for example, financial management, operational 

guidance, IT consulting, transaction consulting, and connecting portfolio companies to potential 

customers, investors, board members, and officers. These are services that the portfolio 

companies need to grow their businesses and vary depending on the portfolio company’s stage in 

the venture capital ecosystem. As these services to portfolio companies are a type of equity 

support, SSBCI funds, out of the federal contribution, may be used to pay for such support up to 

an annual average of 1.71 percent of the federal contribution to a venture capital fund over the 
19

life of the jurisdiction’s venture capital program. 

In the agreement between a jurisdiction and a venture capital fund, the fund must be required to 

identify the services to be provided to portfolio companies and annually certify that these 

services were provided. The agreement between the fund and the portfolio companies should 

include disclosure of these services offered by the fund manager. Consistent with industry 

standards on payments of fees to cover these services to portfolio companies, the fund should 

reimburse the jurisdiction for payments of such services covered by SSBCI funds before returns 

on investment are paid to the general or limited partners. 

2. What is the definition of a venture capital fund? [12/15/2021, updated 09/27/2022]

For purposes of SSBCI, a venture capital fund is an entity that meets the Securities and 

Exchange Commission’s (SEC) definition of venture capital fund set out at 17 C.F.R. 

§ 275.203(l)-1 as well as any entity that would meet that definition but for the form of the 

investment of SSBCI funds in the entity, e.g., via a debt instrument (in the latter case, this 

deviation from the regulatory definition may have implications for the ability of program 

participants to rely on the SEC’s venture capital fund definition and any associated exemption 

from certain requirements under the Investment Advisers Act of 1940). For example, entities that 

receive SSBCI funding via a debt instrument in a debt/equity hybrid OCSP described in FAQ #1 

under “Section VIII.a, Approving State OCSPs – In General,” will qualify as a “venture capital 

fund” for purposes of SSBCI, so long as the entities otherwise meet the definition under 

17 C.F.R. § 275.203(l)-1. 

3. How is the “annual average” calculated for purposes of the limit of 1.71 percent of the 

federal contribution to a venture capital fund that is allowed to cover services to 

portfolio companies? [03/02/2022]

Funds from the federal contribution may be used to pay for such support services up to an annual 

average of 1.71 percent of the federal contribution to a venture capital fund over the life of the 

jurisdiction’s venture capital program (referred to as the “1.71 percent allowance”). The “annual 

average” is calculated based on the average amount of the federal contribution that is used to 

cover services to portfolio companies over each year of the life of the venture capital fund, up to 

a maximum of ten years. Because the 1.71 percent allowance is an average, the fund may in 

some years use an amount of the federal contribution greater than 1.71 percent to cover services 

to portfolio companies, so long as in other years the amount used is less than 1.71 percent. 

Because the annual average is calculated over a period of up to ten years, the maximum 

expenditure on services to portfolio companies is 17.1 percent of the federal contribution 

(i.e., 1.71 percent x 10 years). If, however, a fund’s life is less than ten years, the annual average 

for such fund must be calculated based only on the life of that fund. For example, if the life of a 

fund is only five years, the maximum allowance for such fund is 8.55 percent 

(i.e., 1.71 percent x 5 years). The percent of the federal contribution that may be used to cover 

the services to portfolio companies must be set forth in the contract between the SSBCI investor 

(i.e., the eligible jurisdiction or its contracted entity) and the venture capital fund. The 

contractual terms should not allow the expenditure to exceed the maximum allowance calculated 

based on the life of the venture capital fund. 
20

4. In addition to the 1.71 percent allowance for services to portfolio companies, can a 

jurisdiction also use administrative cost funds for its equity/venture capital programs? 

[03/02/2022]

As described in Section XI of the Capital Program Policy Guidelines, administrative costs for the 

main capital allocation are capped at 5 percent of SSBCI funds for the first tranche and 3 percent 

for each of the second and third tranches. The 1.71 percent allowance applies to the federal 

contribution, not the administrative cost funds. Jurisdictions may use their administrative cost 

funds for equity/venture capital programs, including venture capital fund operating expenses, 

subject to the Uniform Cost Principles in 2 C.F.R. Part 200 Subpart E. 

5. What are the benefits of the “Incubation Funding” and “Early-Stage Investment 

Models”? [03/02/2022]

Under these models described in Section VIII.i of the Capital Program Policy Guidelines, 

jurisdictions may choose to offer private investors a call option. The call option allows private 

investors to buy the SSBCI shares or other securities, such as convertible notes, at cost or at a 

predetermined higher-than-cost multiple. This is possible because under the capital-at-risk 

standard for these models, the private capital must be pari passu with, or junior to, the SSBCI 

investment in cash flow rights only up to the repayment of the SSBCI investment. A call option 

that offers an at-cost buyout does so by offering a 1.0X call option for the private investor to 

acquire the SSBCI shares or other securities at a price per share equal to the amount of the 

investment. A jurisdiction may also benefit from investment gains by offering a higher-than-cost

option (such as 1.5X or 2X). 

Jurisdictions can use a call option to incentivize private investors that have experience and a 

track record in early-stage investing to provide capital alongside jurisdictions to reach 

underserved entrepreneurs or undertake high-risk opportunities. Furthermore, employing these 

models can help increase the provision of incubator-like services to early-stage businesses in that 

jurisdiction to accelerate their growth and decrease their likelihood of failure, fostering job 

creation and economic development in the jurisdiction. 

6. How is the Early-Stage Investment Model different than the Incubation Funding 

Model? [03/02/2022]

These models are described in Section VIII.i of the Capital Program Policy Guidelines. 

The Incubation Funding Model involves an investment program in which the jurisdiction 

contributes SSBCI capital to a fund. Any fund that provides investment capital to portfolio 

companies and meets all applicable SSBCI requirements (including the investment size limit, 

requirement to directly or indirectly provide incubator-like services to all companies in the 

fund’s portfolio, and the necessary experience and track record in early-stage investing) can 

qualify under the Incubation Funding Model. Examples of funds that may qualify include seed 

funds, venture capital funds, accelerators acting as funds, university technology investor office 
21

funds, impact investors, or angel structures raising fund-like structures such as angel groups, 

syndicates, or super-angel funds.

In contrast, the Early-Stage Investment Model involves a direct equity investment program 

where a jurisdiction’s SSBCI funds are co-invested alongside private capital in each qualifying 

investment.

Under either model, the jurisdiction may offer a call option to the fund (in the Incubation 

Funding Model) or the private investors (in the Early-Stage Investment Model) to buy the SSBCI 

shares or other securities, such as convertible notes, at a predetermined price or multiple (greater 

than or equal to 1).

7. Under the Early-Stage Investment Model and the Incubation Funding Model, the fund 

or co-investor must have a history of providing “incubator-like services.” What are 

“incubator-like services”? [03/02/2022]

Incubator-like services are services that are provided to entrepreneurs in the very early stages of 

business development and are not typical services provided to portfolio companies by most 

venture capital funds. For example, incubator-like services might include a package of activities 

such as providing workspaces, networks, and feedback forums, potentially in shared spaces with 

other entrepreneurs; offering business training programs on accounting, financial statements, use 

of option pools, and financial projections; giving pre-product feedback on pitch construction, 

platform choice, engineering, and revenue model types; and providing training to early-stage 

companies on business formation and employment laws. Incubator-like services may include 

program-based services typically offered by accelerator programs that are fixed-term or 

cohort-based to capitalize on economies of scale and build entrepreneurial ecosystems. 

Incubator-like services may be provided by any entity qualified to perform such services and 

must be provided consistent with all applicable SSBCI requirements to satisfy the requirement 

under the Incubation Funding Model or Early-Stage Investment Model.

8. Is the fund or co-investor under the Incubation Funding or Early-Stage Investment 

Model, respectively, required to provide incubator-like services to startups? 

[03/02/2022]

A venture capital fund (in the Incubation Fund Model) or a co-investor (in the Early-Stage 

Investor Model) must provide incubator-like services to investee companies. However, these 

services may be provided either directly, by the venture capital fund or co-investor, or indirectly, 

through an incubator or another organization. Under the Incubation Funding Model, the available 

incubator-like services must be equally accessible to all portfolio companies.

9. What should jurisdictions consider in structuring the call option’s price and duration 

under the Incubation Funding and Early-Stage Investment Models? [03/02/2022]

Under the Incubation Funding and Early-Stage Investment Models, the purpose of the call option 

to buy the SSBCI shares or other securities, such as convertible notes, is to incentivize private 

investors that are considering contributing capital to a fund with SSBCI capital, or to co-invest 
22

with SSBCI capital, to bear the economic risk of investing in early-stage companies, including 

start-ups that may need a longer horizon for realizing market or revenue opportunities. Treasury 

encourages jurisdictions to consider how to use the option exercise price and duration (i.e., the 

time period during which the option may be exercised) to effectively create such incentives.

For example, an option duration of three to five years is, in many cases, sufficient to create an 

incentive for these private investors because the portfolio companies that are most likely to 

achieve success will have likely raised follow-on rounds of capital at higher valuations by that 

time, thereby providing the necessary information for the private investors to act, if desired, on 

the option. However, jurisdictions may also want to consider the sector focus of the fund in 

determining the option duration, as some sectors require more time for market realization.

Treasury also encourages jurisdictions to consider the incentives created when determining the 

call option’s exercise price. Jurisdictions are not limited to offering the call option to buy the 

SSBCI shares or other securities, such as convertible notes, at cost. A call option that offers an 

at-cost buyout does so by offering a 1.0X call option, where 1.0X means that the price for 

exercising the option (i.e., purchasing the SSBCI shares) is 1.0 times the amount of the initial 

SSBCI investment. A jurisdiction may want to set a call option exercise price that would imply a

return for the jurisdiction if the option is exercised; for example, a 1.5X call option or even 

higher option exercise price allows the jurisdiction to partake in the upside gains from the 

investment. 

The various ways in which a jurisdiction can choose to structure the call option exercise price 

and duration can be combined to reflect the jurisdiction’s sustainability objectives, the 

willingness of private investors to take risk, and the expected trigger events. For example, a 

jurisdiction could offer a 1.0X call option on the jurisdiction’s SSBCI investment if the call 

option is exercised within three years, after which the option increases to 1.5X, and to 2.0X after 

the fifth anniversary. 

10. Is the 1.71 percent allowance for services to portfolio companies in the context of 

venture capital funds available for debt funds? [09/27/2022]

Because the 1.71 percent allowance for services to portfolio companies is permissible only for 

funds that meet the definition of a “venture capital fund,” debt funds are unlikely to qualify for 

the 1.71 percent allowance. As noted in FAQ # 2 above in this section, for purposes of SSBCI, a 

venture capital fund is an entity that meets the SEC’s definition of venture capital fund set out at 

17 C.F.R. § 275.203(l)-1 as well as any entity that would meet that definition but for the form of 

the investment of SSBCI funds in the entity. Under 17 C.F.R. § 275.203(l)-1(a)(2), to qualify as 

a venture capital fund, an entity is subject to certain limitations on its ability to acquire assets 

other than qualifying equity investments and short-term holdings. Debt funds are unlikely to 

meet this requirement.

11. Can the 1.71 percent allowance be used to provide services to a small business before 

the venture capital fund invests in any portfolio companies? [09/27/2022]
23

If a venture capital fund has not invested in any portfolio companies since the date of the first 

close of SSBCI capital, the fund must satisfy three criteria to use the 1.71 percent allowance 

described in Capital Program Policy Guidelines Section VIII.i, “Additional Guidance Regarding 

Venture Capital Programs – Services to Portfolio Companies”: 

• First, the fund may make payments using the 1.71 percent allowance only within 

12 months after the date of the first close of SSBCI capital. 

• Second, the fund’s payments using the 1.71 percent allowance before an investment in a 

portfolio company cannot exceed 3 percent of the federal contribution to the venture 

capital fund over the 12-month period after the date of the first close of SSBCI capital. 

• Third, the fund’s payments must satisfy all the requirements related to the 1.71 percent 

allowance in the Capital Program Policy Guidelines and all other SSBCI rules and 

guidance, including FAQs. 

The 1.71 percent allowance may be used only for services provided to potential portfolio 

companies related to the same venture capital fund to which the SSBCI capital will be 

contributed and cannot be used for services provided before an agreement to contribute SSBCI 

capital to the venture capital fund is executed. Consistent with industry standards, the venture 

capital fund should reimburse the jurisdiction for payments for such services before returns are 

paid to the general or limited partners.

12. What documentation standards apply to the 1.71 percent allowance? [09/27/2022]

As explained in the Capital Program Policy Guidelines, in the contractual agreement between a 

jurisdiction and a venture capital fund, the fund must be required to identify the services to be 

provided to portfolio companies and annually certify that these services were provided. The 

agreement between the venture capital fund and portfolio companies should include disclosure of 

these services offered by the fund manager. 

To support its annual certification of services provided, the venture capital fund should maintain 

documentation of services provided in line with industry standards, such as periodic reports on 

portfolio companies provided to private capital limited partners. Jurisdictions should consider 

adopting best practices to monitor venture capital fund activities in line with industry standards, 

such as reviewing the venture capital fund’s documentation of services provided.

13. Treasury approved my jurisdiction’s venture capital fund program, but we have 

changed venture capital funds or selected venture capital funds that were not named in 

our original application. Should the jurisdiction notify Treasury of the new venture 

capital funds selected under the program? [01/19/2024]

Yes. In general, participating jurisdictions must implement their approved programs consistent 

with their approved applications, and certain changes to the operations of those programs may 

require notification to or pre-approval from Treasury. See also General FAQ # 4; Allocation 

Agreement Sections 3.7, 6.1, and 6.3. 
24

Pre-approval from Treasury is generally not required before a jurisdiction selects or changes 

venture capital funds receiving investments under an approved program. However, because the 

selection of a venture capital fund impacts a jurisdiction’s ability to carry out an approved 

venture capital fund program, participating jurisdictions should generally notify Treasury of the 

selection of venture capital funds when none were selected at the time of application approval, as 

well as changes to selected venture capital funds that were specified in the original application. 

The participating jurisdiction should notify Treasury within 30 calendar days of the date that 

SSBCI funds are committed, pledged, or otherwise promised in writing to a new venture capital 

fund. For jurisdictions that have made such obligations prior to the date of this FAQ and have not 

yet notified Treasury, please notify Treasury within 30 calendar days of the date of this FAQ.

In the notification, participating jurisdictions should provide sufficient information for Treasury 

to understand how the selection will affect the operation of the approved program. Relevant 

information may depend on the context of a particular jurisdiction’s program, but may include 

information such as:

1. Name of the jurisdiction’s approved venture capital fund program, 

2. Name of the venture capital fund selected,

3. Amount of SSBCI funds obligated to the selected venture capital fund,

4. Date SSBCI funds were (or will be) obligated to the venture capital fund,

5. Size of the venture capital fund at the time SSBCI funds were (or will be) obligated to the 

venture capital fund, including all capital raised in the current close and previous closes, 

that the participating jurisdiction has identified as available to invest alongside SSBCI 

funds, 

6. Total size of the venture capital fund at the time of the SSBCI obligation, including all 

capital raised in the current close and previous closes, and 

7. A brief description of the venture capital fund’s investment strategy.

In addition, if there are updates to the operation of (but not the identify of) selected venture 

capital funds (e.g., the size of the fund), the participating jurisdiction may consider notifying 

Treasury of these updates as well. 

The participating jurisdiction may email the notification and all relevant information to 

SSBCI_Information@Treasury.gov and cc: the participating jurisdiction’s assigned Outreach 

Manager.

Note that this answer is limited to notifications regarding venture capital funds selected for 

investment; Treasury may require review, pre-approval, information, or amendments to the 

Allocation Agreement in the case of other proposed changes to approved programs, such as a 

change of the contracted entity administering a direct investment program. Jurisdictions 

contemplating other changes to approved programs should contact Treasury regarding whether 

additional information or additional steps may be required.
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Section IX.c, Other SSBCI Program Requirements – In-State and Out-of-State Loans and 

Investments

1. Treasury requires each jurisdiction to use at least 90 percent of its SSBCI Capital 

Program funding for loans, investments, and other credit or equity support for small 

businesses headquartered in the jurisdiction. What types of transactions would qualify 

in this 90-percent funding category for Tribal governments? [12/15/2021]

For Tribal governments, the following types of transactions qualify for purposes of this 

90 percent requirement (i.e., qualify as “in-jurisdiction transactions”):

• Transactions with businesses on Tribal lands, which include lands defined in 18 U.S.C. 

§ 1151; Alaska Native regions established pursuant to the Alaska Native Claims 

Settlement Act (43 U.S.C. § 1601 et seq.); and any land owned by a Tribal government in 

trust, fee, or restricted fee status.

• Transactions with businesses in states of the United States where the Tribe is physically 

located or within which the Tribe exercises jurisdiction. 

• Transactions with Tribal enterprise-operated businesses, businesses owned by Tribal 

members, and businesses in states of the United States in which Tribal members reside. 

For example, a Tribe that is headquartered in Arizona may have most of its members in a 

town on the border of Nevada and Arizona. Because the Tribe exercises jurisdiction over 

its members in both states, it may invest in both states. 

Tribal SSBCI program transactions that do not fall into the above categories do not qualify as 

in-jurisdiction transactions and thus are “out-of-jurisdiction transactions.” Up to 10 percent of a 

Tribal government’s SSBCI funding can be used for out-of-jurisdiction transactions, and for each 

out-of-jurisdiction transaction, a Tribal government must reasonably explain how the transaction 

benefits the Tribe’s economy. For example, the Tribal government may explain that the 

out-of-jurisdiction transaction may create or increase demand for products and services of 

businesses within the Tribe’s jurisdiction.

Additionally, regardless of whether the Tribal government’s OCSP will involve transactions in 

or out of the 90-percent funding category, the Tribal government should describe, as part of its 

SSBCI application, the expected benefits to the Tribe, Tribal businesses, and Tribal members 

from the OCSP. In the description, the Tribal government should focus on, but not limit its 

discussion to, the projected number and amount of SSBCI loans or investments closed through 

the OCSP; the number, types, and quality of jobs created; projected increases in tax revenues 

resulting through the OCSP; long-term economic benefits of the OCSP’s investments; and other 
26

expected benefits from the economic development objectives of the Tribal government. In 

accordance with 12 U.S.C. § 5705(d)(1), in determining whether an OCSP is eligible for SSBCI, 

Treasury must consider this information. In recognition of the differential tax status of Tribal 

enterprises and member businesses, a Tribe may describe how the tax revenue category is 

applicable or inapplicable for its respective jurisdiction. See Section VIII.g, Approving State 

OCSPs – Considerations for Approving OCSPs. 

Section IX.f, Other SSBCI Program Requirements – Minimum National Customer 

Protection Standards

1. The Capital Program Policy Guidelines state that the interest rate for each 

SSBCI-supported loan, at the time of obligation, may not exceed the National Credit 

Union Administration’s (NCUA’s) interest rate ceiling for loans made by federal credit 

unions. As of what date is the interest rate cap determined? That is, what does “at the 

time of obligation” mean? [03/02/2022]

“At the time of obligation” means at the time the loan is made. For example, if the 

SSBCI-supported loan has a variable interest rate, the interest rate at any point during the life of 

the loan cannot exceed the NCUA’s interest rate ceiling in effect at the time the loan was made. 

Any change in the NCUA’s interest rate ceiling after a SSBCI-supported loan is made does not 

impact the loan. That is, the interest rate on any loan made before a change in the NCUA’s 

interest rate ceiling would continue to be capped by the rate ceiling at the time the loan was 

made, as opposed to being capped by the new rate ceiling. The interest rate on any loan made 

after the change, however, would be capped by the new rate ceiling rather than the prior rate 

ceiling.

Section IX.g, Other SSBCI Program Requirements – Disclosure of Terms

1. FAQ incorporated under the Capital Program Policy Guidelines; accordingly, 

FAQ removed on 12/04/2023]

Section XI. Administrative Costs

1. How is Program Income calculated? [08/16/2023]

Program Income is defined as gross income received by the Participating Jurisdiction that is 

directly generated by an SSBCI-supported activity or earned as a result of SSBCI Funds during 

the SSBCI program period. See Allocation Agreement Section 1.1. When income is generated by 

an approved program that includes non-SSBCI funds, only the pro-rata share of Program Income 

that is attributable to SSBCI Funds is considered Program Income. For example, in an OCSP that 

is comprised of 60 percent non-SSBCI sources and 40 percent SSBCI Funds, 40 percent of the 

gross income is considered Program Income.
27

2. Can Program Income be used to pay for SSBCI administrative costs? [08/16/2023]

Yes. In addition to Allocated Funds (which are subject to the administrative cost caps set out in 

Section XI of the SSBCI Capital Program Policy Guidelines) Participating Jurisdictions may use 

Program Income (as that term is defined in the Allocation Agreement) to pay for administrative 

costs.

Program Income may only be used to carry out Approved Programs in accordance with 

Section 3.3 of the Allocation Agreement. 

In addition, the Guidelines make clear that administrative costs, including administrative costs 

paid for through Program Income, are defined and governed by the Uniform Cost Principles set 

out in Subpart E of 2 C.F.R. Part 200, which include but are not limited to: 

§ 200.430 Compensation – personal services,

§ 200.439 Equipment and other capital expenditures,

§ 200.453 Materials and supplies costs, including costs of computing devices, and

§ 200.459 Professional service costs. 

Finally, note that there is no limitation on a participating jurisdiction’s ability to use its own 

non-SSBCI funds to pay for administrative costs.
28

TECHNICAL ASSISTANCE (TA) GRANT PROGRAM

Section III. Eligible Recipients, Beneficiaries, and TA Providers

1. Can a state participating in the TA Grant Program make a subaward to a political 

subdivision of that state? [09/21/2022]

Yes. Section III.c, “Eligible TA Providers,” of the TA Grant Program Guidelines specifies that a 

subrecipient may be an entity of the eligible recipient (e.g., a state entity). For purposes of the 

TA Grant Program, this includes a city or other entity that is a political subdivision of a state 

under applicable state law. Under section 3009(e)(1) of the SSBCI statute (12 U.S.C. 

§ 5708(e)(1)), state entities, including political subdivisions, must carry out the state’s technical 

assistance plan by providing technical assistance to qualifying small businesses directly or 

contracted with legal, accounting, and financial advisory firms.

2. How does Treasury define a “legal, accounting, or financial advisory firm” for purposes 

of the TA Grant Program? [09/21/2022]

Section 3009(e) of the SSBCI statute (12 U.S.C. § 5708(e)(1)) specifies that a jurisdiction may 

provide technical assistance either directly or contracted with legal, accounting, and financial 

advisory firms. While these terms are not defined in the SSBCI statute, the statutory objective is 

to provide legal, accounting, and financial advisory services to qualifying small businesses. 

Thus, the determination of whether an entity is a legal, accounting, or financial advisory firm 

depends on the extent to which the entity provides legal, accounting, or financial advisory 

services as described in Section IV of the TA Grant Program Guidelines. In particular, entities 

must meet at least one of the following criteria: 

a. A primary purpose of the entity or a central part of the entity’s mission is to provide 

legal, accounting, and/or financial advisory services, 

b. The entity regularly markets or publicizes itself as providing legal, accounting, and/or 

financial advisory services, or

c. At least 25% of the entity’s revenues or staff are dedicated to providing legal, 

accounting, and/or financial advisory services.

These entities may be either nonprofit or for-profit entities, as specified in Section III.c of the 

TA Grant Program Guidelines.

Recipients should maintain documentation evidencing their determination that each entity with 

which the recipient contracts to provide services under the TA Grant Program is a legal, 

accounting, or financial advisory firm. Treasury anticipates that forthcoming TA Grant Program 

Reporting Guidance will require each recipient to report on each TA provider with which it 

contracts to provide services under the TA Grant Program and report the recipient’s 

categorization of the entity as a legal, accounting, or financial advisory firm. In making these 

determinations, recipients may, but are not required to, require entities to self-certify that they 

meet the definition set out in this FAQ.
29

3. Can a Tribal-affiliated entity or a non-Tribal entity apply for a TA grant, sign a 

TA Grant Agreement, and implement the grant on behalf of a group of Tribal 

governments? [05/09/2023]

Treasury will permit either non-Tribal entities or Tribal-affiliated entities (referred to as “Agent 

for the Tribes”) to directly apply for and administer TA grants on behalf of a group of Tribal 

governments only under the following conditions, which ensure they are duly authorized by the 

relevant Tribes to act as their agent and have the capacity to effectively carry out the TA Grant 

Program on their behalf.

First, consistent with the SSBCI TA Grant Program Application, the Agent for the Tribes must 

provide Treasury with Tribal resolutions or other official Tribal documentation corresponding to 

each Tribal government listed in the joint application. This documentation must state that the 

Tribal government consents to the Tribal government’s inclusion in a joint TA Grant Program 

application with other Tribal governments, and have designated the Agent for the Tribes as their 

agent with the authority to take the following actions on behalf of the Tribal government:

1. Submit the TA Grant Program Application;

2. Sign the TA Grant Agreement; and

3. Receive and disburse SSBCI TA Grant Program funds.

Second, the Agent for the Tribes (in its individual capacity) must certify to Treasury prior to 

application approval and upon submission of each required TA Grant Program report or request 

for additional disbursements of funding that:

1. It is duly authorized to act as agent of each of the Tribal governments and of the 

group of Tribal governments for the purposes of the SSBCI TA Grant Program.

2. It is capable of fulfilling program requirements on behalf of each of the Tribal 

governments and the group of Tribal governments.

3. To the extent it is acting as an agent for the group of Tribal governments, it agrees to 

comply with all terms and conditions of the TA Grant Agreement, including the 

SSBCI statute, the TA Grant Program regulations, TA Grant Program guidance, and 

other applicable Federal laws and regulations including with respect to the 

requirements for reporting and use of funds.

4. To the extent that it is acting in its own capacity, it agrees to comply with all terms 

and conditions of the TA Grant Agreement, including the SSBCI statute, the TA 

Grant Program regulations, TA Grant Program guidance, and other applicable Federal 

laws and regulations including with respect to the requirements for reporting and use 

of funds as if it were a subrecipient.

5. To the extent that it is also implementing or will also implement an SSBCI capital 

program or TA grant for another jurisdiction (e.g., for a U.S. state), it has disclosed 

that relationship to the group of Tribal governments and has procedures in place to 

protect against any conflicts of interest that may arise. 
30

6. It is not debarred, suspended, or otherwise excluded from or ineligible for participation 

in Federal assistance programs or activities prior to obtaining any grant funds from 

Treasury per 31 CFR Part 19 and see also 2 CFR § 200.214.

If the TA Grant application is approved, Treasury will then permit the Agent for the Tribes to 

sign the TA Grant Agreement and to directly receive disbursements of funding in its capacity as 

the duly authorized agent of the group of Tribal governments. 

Notwithstanding the above, the group of Tribal governments—not the Agent for the Tribes —is 

considered the recipient where that term is used in Treasury’s guidance and 2 C.F.R. Part 200. 

Accordingly, Tribal governments are ultimately responsible for compliance with the terms and 

conditions of the TA Grant, including supervising and monitoring their agents and other third 

parties they may choose to work with to carry out the program. Tribal governments may wish to 

clearly specify in their agreements with each other or with the Agent for the Tribes how they 

intend, as a group, to monitor the Agent for the Tribes, and the effect for each of the Tribes in the 

event of any non-compliance or remedial actions taken against the group of Tribal governments, 

as contemplated by the TA Grant Agreement and 2 C.F.R. §§ 200.208, 200.339, and 200.340.

4. Does a Tribal government need to designate a specific agency, department, or 

subdivision as the recipient of its TA grant? [09/28/2023]

No. The TA Grant Program application and TA Grant Program Guidelines generally contemplate 

that a jurisdiction would designate a “specific agency, department, or political subdivision” to 

receive the TA grant on behalf of the jurisdiction as that recipient. In that case, Treasury requires 

the application to reflect the designated agency, department, or political subdivision applying for 

the TA grant on behalf of the jurisdiction as the recipient, and the application must include a 

Unique Entity Identifier (UEI) that is associated with the designated entity. 

However, a Tribal government may choose to apply under its own name and receive the TA 

grant as the recipient instead of designating an agency, department, or political subdivision to 

apply for and receive the TA grant on its behalf, so long as that choice is clearly reflected in the 

relevant application materials. For example, the Tribal government itself should be listed in 

Section 4.1 of the TA Grant Program application, and the attached letter from the governing 

official of the Tribal government must also reflect the Tribal government as the recipient of the 

TA grant. In such case, the Tribal government must be registered on SAM.gov and include its 

UEI in the application. 

Section V. TA Grant Program Application 

1. How should Tribal government TA Grant Program applications address the connection 

to economic benefits requirement in the TA Grant Program Guidelines? [07/21/2023]

Section V.b of the TA Grant Program Guidelines (TA Guidelines) states that eligible recipients 

must describe in their TA plans how their anticipated TA providers together have the capability 

to achieve economic benefits to SEDI-owned businesses and very small businesses (VSBs) in a 
31

manner proportional to the ratio of the eligible recipient’s allocated capital funds under the 

SEDI capital allocation (12 U.S.C. § 5702(d)) to the eligible recipient’s allocated capital funds 

under the VSB capital allocation (12 U.S.C. § 5702(f)).

For purposes of a Tribal government application, if the application describes how its plan is 

designed to meet the needs of SEDI-owned businesses and VSBs, Treasury will consider the 

requirement to be met; no discussion of a specific ratio is required.

Section VIII. Award Administration Information

1. How will Treasury disburse TA Grant Program funds? Will fixed amount award 

procedures apply to TA Grant Program awards? [07/25/2022, updated 12/08/2022]

Funds for TA Grant Program awards that are $250,000 or less will be disbursed in full at the 

time of award issuance. Fixed amount award procedures will apply to awards of $250,000 or 

less. Fixed amount awards are defined at 2 C.F.R. § 200.1 and are designed to reduce some of 

the administrative burden applicable to federal awards while providing for accountability in the 

form of performance and results. TA Grant Program recipients with awards of $250,000 or less 

will not be required to submit a budget and narrative justification with their application or 

request any post-award budget amendments. TA Grant Program recipients still will be required 

to submit all other application documents, including a TA plan describing performance goals and 

benchmarks, and all required reports. 

Funds for TA Grant Program awards that exceed $250,000 will be disbursed in thirds 

(33 percent, 33 percent, and 34 percent). Fixed amount award procedures will not apply to 

awards that exceed $250,000. The transfer of the first 33 percent will occur promptly following 

the receipt of the fully executed Notice of Award for the TA grant. To request a disbursement of 

TA award funds, a TA recipient must submit a Form SF-425 “Federal Financial Report (FFR)” 

that demonstrates that the recipient has used at least 80 percent of the prior disbursement of 

TA award funds. To assess whether a TA recipient has used 80 percent of the prior disbursement 

of TA award funds, Treasury will use the sum of the following two reporting items from the 

Form SF-425: 

• Federal share of expenditures (line 10.e); and 

• Federal share of unliquidated obligations (line 10.f).

In addition, TA recipients must submit a brief narrative describing how the project is progressing 

in accordance with the recipient’s TA plan in the approved application. The recipient should 

succinctly address progress towards achieving the recipient’s performance goals established 

under the TA plan, including output measures and benchmarks.