MONTANA STATE SMALL BUSINESS CREDIT INITIATIVE 2.0 LOAN PARTICIPATION PROGRAM (MT SSBCI 2.0 LPP)
The American Rescue Plan Act of 2021 (ARPA) reauthorized and amended the Small Business Jobs Acts of 2010 (SBJA) 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 the Treasury that was created to strengthen state programs that support private financing to small businesses. SSBCI is expected to create billions of dollars in lending and investments to small businesses that are not getting the support they need to expand and create jobs.
The MT SSBCI 2.0 LPP will be used to assist existing Montana businesses that need additional borrowings to stabilize, pivot, expand, or re-start their business and to assist new Montana businesses entering the market. The MT SSBCI 2.0 LPP will partner with approved economic development organizations throughout the state to identify businesses in their regions that could benefit from the program. The program is structured to participate directly in a lender loan at a participation rate of 50%. MT SSBCI 2.0 LPP participation will occur via a participating lender.
Borrower and Loan Size Requirements:
- Eligible borrowers must have fewer than 750 employees
- The MT SSBCI 2.0 LPP maximum participation amount is $1 million
- If the Primary and Participating Lenders feel a project warrants a participation amount of more than $1 million, it can be presented to program staff Agency Management for consideration. It must demonstrate revenue growth, an employment base increase, and a positive market share impact
- The MT SSBCI 2.0 LPP will not provide credit if a given transaction exceeds $20 million
- Up to 3-year term with monthly payments – 50 basis points (0.50%)
- 3-year up to 5-year term with monthly payments – 100 basis points (1.00%)
- 5-year up to 7-year term with monthly payments – 150 basis points (1.50%)
- 7-year up to 10-year term with monthly payments – 200 basis points (2.00%)
- 10-year up to 15-year term with monthly payments – 250 basis points (2.50%)
- 15-year to 20-year term with monthly payments – 300 basis points (3.00%)
- Any intermediate term amortization will be at the next tier higher interest rate
- If amortization other than monthly, the MT SSBCI 2.0 LPP Interest Rate will be increased by 50 basis points (0.50%)
- Lender service fee cannot exceed 50 basis points (0.50%)
- The servicing CDFI/RLF will be assessed an annualized 25 basis points (0.25%) service fee by MT SSBCI 2.0 LPP. The fee will be assessed on the calendar quarter on the balances of all outstanding loans.