US Treasury grants $3.9M for Puerto Rico SMEs
Puerto Rico Gov. Pedro Pierluisi and Economic Development Bank (EDB) President Luis Alemañy have announced the approval of a $3.9 million grant awarded by the U.S. Treasury Department’s State Small Business Credit Initiative Technical Assistance Program (SSBCI-TA) to aid local entrepreneurs.
“Our [small and medium-sized enterprises (SMEs)] represent the most productive sector in our economy. They are the ones that employ a great part of our labor force,” said Pierluisi. “We are announcing a new technical assistance program through our Economic Development Bank to support our entrepreneurs in their requests for financing and capital investment funds.”
The governor recalled last year’s allocation of $109 million from the Treasury to create a credit and capital program for SMEs with 500 or fewer employees. The SSBCI program received more than $10 billion nationally from the American Rescue Plan Act (ARPA).
“This program matches private investments dollar for dollar, and the average amount of the loans offered under the program is $5 million,” the governor explained. “The Economic Development Bank has already processed more than 25 cases under this new program.”
Pierluisi also highlighted the free technical assistance to SMEs: “Under the Impulso a tu Negocio program, the Economic Development Bank will contract specialized providers that will offer legal services, accounting services, financial advice, risk consultation and management, among other support that our entrepreneurs may need.”
Pierluisi explained that the program is for companies in the process of applying for financing or credit under the SSBCI program, as well as other federal and state economic assistance programs.
“This way, a large number of Puerto Rican companies will be able to participate in these free training sessions provided by the Economic Development Bank,” Pierluisi said.
This grant includes assistance in establishing banking relationships and other financial services, applications for government programs for SMEs, preparation of financial analyses, identification of sources of credit, capital, grants, and other financing.
Additionally, the assistance covers consultations on factors that may hinder access to financing, financial management consulting, development of presentations for potential investors, financial models, business plans, and advice on risk mitigation or transfer.
Up to $10K in services available
The services will be delivered through group training sessions, personalized counseling and online education by the subrecipients for entrepreneurs who are in the process of obtaining or applying for capital or credit under SSBCI or any federal or state program, such as the Small Business Administration.
Depending on their needs, entrepreneurs could benefit from services valued between $5,000 and $10,000, said Alemañy. “This money will be distributed through a subrecipient model, which will be responsible for providing services to entrepreneurs or identifying professionals who will provide them. Entrepreneurs will receive free services through these companies we select as subrecipients, and the EDB will pay with the funds from the grant.”
The EDB website has published a Notice of Funding Opportunity (NOFO) for entities interested in becoming subrecipients of the EDB. This is to provide information about this grant and the application process for participation in SSBCI-TA.
Legal, accounting, and financial advisory service providers have until April 30 to submit their proposals to the EDB, which will conduct a virtual orientation meeting on April 12. Following the review of all applications received through the NOFO, the EDB will select subrecipients to offer the aforementioned services free of charge to entrepreneurs across the island.
Since the SSBCI’s inception, the EDB has facilitated more than $17 million in financing to 28 entrepreneurs, in collaboration with commercial banks and local cooperatives, under two credit programs authorized by the U.S. Treasury. These programs, “Participation Loans and Collateral Support,” cater to clients with an average size of 500 employees or fewer.
Alemañy also mentioned that the EDB is working on amending the SSBCI application to establish a venture capital investment program to aid new entrepreneurs who currently lack access to financing.
Additional support
Pierluisi and Alemañy also provided an update on the grant awards under the Small Business Financing Program (SBF) of the Community Development Block Grant – Disaster Recovery (CDBG-DR) program.
They said that over the past six years, the funds have supported entrepreneurs affected by hurricanes Irma and Maria, positively impacting Puerto Rico’s 78 municipalities, retaining 29,716 jobs and creating 15,809 new ones.
A total of $221.1 million was distributed among 4,471 entrepreneurs in industries such as services, agriculture, retail and wholesale trade, restaurants, manufacturing, and tourism.
