Compilation of Rules and Regulations of the State of Georgia › Department 110 - RULES OF GEORGIA DEPARTMENT OF COMMUNITY AFFAIRS › Chapter 110-38 - GEORGIA STATE SMALL BUSINESS CREDIT INITIATIVE 2.0 PROGRAM › Subject 110-38-1 - GEORGIA STATE SMALL BUSINESS CREDIT INITIATIVE 2.0 PROGRAM REGULATIONS › Rule 110-38-1-.02 - General Scope and Purpose

Current through Rules and Regulations filed through June 27, 2024
(1) The American Rescue Plan Act of 2021
				(ARPA) reauthorized and amended the Small Business Jobs Act of 2010, codified
				at 12 U.S.C. §
										5701 et seq., to provide $10 billion to fund
				the State Small Business Credit Initiative (SSBCI) as a response to the
				economic effects of the COVID-19 pandemic. SSBCI is a federal program
				administered by the Department of Treasury (Treasury) that was created to
				strengthen capital programs that support private financing to small businesses.
				Pursuant to ARPA, Treasury allocated a potential funding amount of $199,616,860
				to the State of Georgia for SSBCI 2.0.
(a) On
				November 4, 2022, Treasury approved the State's application with an executed
				SSBCI Allocation Agreement (Allocation Agreement), which included proposals for
				five programs. The Georgia Department of Community Affairs (DCA) through the
				Georgia Housing and Finance Authority's (GHFA)1 economic development powers and
				GHFA Economic Development Financing, Inc. (GHFA EDFI) plan to use the
				$199,616,860 in SSBCI funds (the Allocated Funds) in five state administered
				SSBCI Programs. Treasury approved the Georgia Loan Participation Program (GA
				LPP) for $70,000,000, the Georgia Small Business Credit Guarantee Program
				(SBCG) for $19,616,860, the Georgia CDFI Program (GA CDFI) for $60,000,000, the
				Georgia Venture Capital Program for $30,000,000 and the Georgia Equity Direct
				Program for $20,000,000.
(b)
				Operation of the five programs under the Georgia State Small Business Credit
				Initiative is subject to the U.S. Treasury SSBCI Capital Program Policy
				Guidelines, SSBCI Capital Program National Compliance Standards, SSBCI Capital
				Program Reporting Guidance, the Treasury- approved Georgia SSBCI application,
				and the Allocation Agreement between Treasury and Georgia. The last annual
				reporting date with Treasury is March 31, 2028, which may be extended by
				Treasury. The Secretary of Treasury shall complete all disbursements and
				remaining obligations before September 30, 2023, according to the SSBCI 2.0
				statute under ARPA.
(c) DCA, as the
				lead SSBCI-designated implementing entity authorized pursuant to the Allocation
				Agreement, shall be responsible for overseeing the five approved programs and
				ensuring compliance of the programs with all Treasury requirements. The
				approved Contracted Entities under the Allocation Agreement are Georgia Housing
				and Finance Authority, GHFA Economic Development Financing, Inc. and IG Fund,
				LLC (Invest Georgia). Invest Georgia will operate under a memorandum of
				agreement with DCA and GHFA EDFI to administer the two venture capital programs
				- the Georgia Venture Capital Program and the Georgia Equity Direct
				Program.
(d) Pursuant to
				12 U.S.C. §
											5702(c)(1), each state that
				is approved for participation in the SSBCI will receive its allocation of main
				capital funds in three disbursements (tranches) as follows: 33 percent, 33
				percent, and 34 percent. The transfer of the first 33 percent occurs promptly
				following the receipt of the fully signed Allocation Agreement. As a
				precondition to receipt of the second and third disbursements, each state must,
				among other things, certify to Treasury that the state has expended,
				transferred, or obligated 80 percent or more of the prior disbursement of
				allocated funds to or for the account of one or more approved programs that
				have delivered loans or investments to eligible businesses.
(e) SSBCI is expected to, in conjunction with
				new small business financing, create billions of dollars in lending and
				investments to small businesses that are not getting the support they need to
				expand and create jobs. ARPA provided for a $6.5 billion main capital
				allocation, $1.5 billion allocation for business enterprises owned and
				controlled by socially and economically disadvantaged individuals (SEDI-owned
				businesses), $1.0 billion incentive allocation for SEDI- owned businesses, $500
				million allocation for very small businesses (VSBs), and $500 million
				allocation for technical assistance funding. The $199,616,860 funding allocated
				to Georgia included $109,140,449 from the main capital allocation, $8,678,471
				from the VSBs allocation, $53,346,483 from the SEDI allocation and $28,451,457
				from the incentive allocation for SEDI-owned businesses. Each state's SEDI
				allocation must be expended for SEDI-owned businesses. Georgia was not required
				to create a separate program for SEDI-owned businesses. However, Georgia must
				maintain records of the total amounts of its SSBCI funds that are expended for
				SEDI-owned businesses for loans, investments, or other credit support. States
				that demonstrate "robust support" for SEDI-owned businesses will be able to
				access their incentive allocation for SEDI-owned businesses in the second and
				third tranches. Each state should aspire to expend a certain percentage (the
				SEDI Objective) of its SSBCI funds for meeting the needs of the SEDI-owned
				businesses within its jurisdiction. Georgia's SEDI Objective is
				53.48%.
(f) Under Georgia's three
				SSBCI loan programs, credit facilities are extended to eligible small
				businesses in Georgia by lenders (banks, credit unions and CDFIs). Lenders will
				undergo a review process to ensure adequate commercial lending experience,
				financial and managerial capacity, and operational skills.