Kentucky will receive a $117 million award from the federal government to support small business growth.
The U.S. Treasury announced Monday that it approved four states for funding through the State Small Business Credit Initiative, as part of a $10 billion investment from the 2021 American Rescue Plan Act.
The treasury also awarded grants to Delaware, Tennessee and Wyoming.
The small business grant program was first introduced in 2010 and then renewed during the COVID-19 pandemic. It provides states with federal funds to help raise capital for small businesses, including by matching lenders’ investments in the businesses and partially covering loans.
Kentucky will use 70% of the funding to match investments made to small businesses, and 30% to cover loans for both businesses and lenders.
During a press call on Monday, Kentucky Gov. Andy Beshear said he was thankful for the federal aid.
“We are one of those states that hasn't had enough access to venture capital and some other forms of capital. And so this, like the investment in 2010, that went so well, is going to significantly help us,” Beshear said.
Kentucky Innovation, part of the state’s Cabinet for Economic Development, is managing the state’s funding. The cabinet is overseeing loan support requests and its contract partner Keyhorse Capital is accepting applications for capital investments.
Monique Kuykendoll Quarterman, Kentucky Innovation’s executive director, said the first of three rounds of funding is scheduled to be released within two months.
“We would access the second and third tranches as the funds are expended in Kentucky,” Quarterman said.
She added that Kentucky will provide funding benefits for marginalized groups, such as providing up to 50% in collateral support for loans to women-owned and minority-owned small businesses.
