Frequently Asked Questions:
SSBCI Applicants

SSBCI is not a grant program, but an economic stimulus program that uses federal dollars to leverage private investment in existing and start-up businesses. LED is a bridge or conduit between the U.S. Treasury, financial institutions and the entrepreneurs and small businesses they serve.

Entrepreneurs should contact a participating equity fund or lending institution. If they are unsure of those participating, they can reference the most up-to-date list of providers on each program page of this website. Guidance is also available by contacting the Louisiana’s Small Business Development Center (SBDC) in your region. A list of SBDCs and contact information for each region can be found here.

Application for SSBCI support can be made starting in April 2023.

The CSP program is ideal for small businesses that are creditworthy but do not have the necessary collateral to secure a loan to the lender’s satisfaction. Please contact your bank or an LED Preferred Lender offering the Collateral Support Program to discuss your project further. The CSP rules found under the CSP homepage can also provide additional details as to eligibility and program requirements.

The Collateral Support and Loan Guaranty programs offer different kinds of support to accomplish the same goal – increase a small business’s borrowing power by reducing the lender’s risk. The Collateral Support Program provides cash to pledge to the loan as additional collateral where a shortfall exists. The Loan Guaranty Program provides a state guarantee to the lender to assume a portion of the risk, thereby enhancing the strength of the borrower’s application and increasing the likelihood that the loan will be approved.

• Lines of Credit
• Startups
• Acquisitions
• Fixed asset purchases
• Purchase or construction of building (limited to 51% owner occupied)

If you are a small business with a shortfall of collateral, please visit our Collateral Support Program page.

Lenders wishing to opt-in to SSBCI’s CSP program may contact LED for more information by emailing LEDSSBCIcollateral@la.gov.

The interest rates and collateral requirements, along with other loan requirements, are negotiated between the borrower and the lender. However, the minimum equity a borrower must contribute under the CSP is 10% and offers collateral support terms up to five years.

Any insured bank, insured credit union, community bank or insured community development financial institution in the state may participate in the Louisiana SSBCI Collateral Support Program by formally opting into the program. LED Preferred Lenders have taken additional steps to demonstrate that they meet all eligibility requirements and have an active interest in Louisiana SSBCI loan programs. Upon completion of the preferred lender process, participating lender names, points of contact and website links will be posted in the LED Preferred Lender tab of the Collateral Support Program page.

The business must be registered and authorized to conduct business in Louisiana and maintain an office in Louisiana to participate in LED SSBCI Programs. Any loan transaction made to a small business outside of Louisiana must first be evaluated and reviewed by LED.

According to the U.S. Treasury SSBCI Guidance, a CDFI Investment Area is defined as a geographic unit (or contiguous geographic units), such as a census tract, located within the United States, that meets at least one of the following criteria:
• Has a population poverty rate of at least 20 percent;
• Has an unemployment rate 1.5 times the national average;
• For a metropolitan area has a median family income (MFI) at or below 80 percent of the greater of either the metropolitan or national metropolitan MFI;
• For a non-metropolitan area that has an MFI at or below 80 percent of the greater of either the statewide or national non-metropolitan MFI;
• Is wholly located within an Empowerment Zone or Enterprise Community; or
• Has a county population loss greater than or equal to 10 percent between the two most recent census periods for Metro areas or five percent over last five years for Non-Metro areas.

As defined by the U.S. Treasury SSBCI Guidance, a VSB is a business with fewer than 10 employees at the time of the loan application and includes independent contractors and sole proprietors.

During the onboarding process for participation in the LED SSBCI MLP, all U.S. Treasury SSBCI required certifications will be provided to the lender. In addition, the U.S. Treasury SSBCI required program certifications, to include the SEDI certification, will be included in the LED SSBCI MLP application. According to the U.S. Treasury SSBCI Guidance, regarding the SEDI certification, businesses will be permitted to identify all the categories in item (1) to (3) that apply, including all of the subcategories in item (1) that apply. For item (1) no documentation or verification is needed; only the borrower’s signature. For items (2) or (3), the certification form must include the physical address of the borrower’s primary residence or the business location, whichever applicable, if in the CDFI Investment Area and also requires the borrower to sign under either instance noted for (2) or (3). The borrower is required to select and sign under SEDI categories 1-3. However, SEDI category (4), if the current business physical location is currently located at the time of application in a CDFI Investment Area, only requires the business physical address. There are no signatures needed from the borrower in the instance of SEDI category (4).

As defined by the U.S. Treasury SSBCI Guidance, SEDI is any of the following: Business enterprises that certify that they are owned and controlled by individuals who have had their access to credit on reasonable terms diminished as compared to others in comparable economic circumstances, due to their (2) membership of a group that has been subjected to racial or ethnic prejudice or cultural bias within American society; gender; (3) veteran status; (4) limited English proficiency; (5) physical handicap;(6) long-term residence in an environment isolated from the mainstream of American society; (7) membership of a federally or state-recognized Indian Tribe; (8) long-term residence in a rural community; (9) residence in a U.S. territory; (10) residence in a community undergoing economic transitions (including communities impacted by the shift towards a net-zero economy or deindustrialization); or (11) membership of another “underserved community” as defined in Executive Order 13985; Business enterprises that certify that they are owned and controlled by individuals whose residences are in CDFI Investment Areas, as defined in 12 C.F.R. § 1805.201(b)(3)(ii); Business enterprises that certify that they will operate a location in a CDFI Investment Area, as defined in 12 C.F.R. § 1805.201(b)(3)(ii); or Business enterprises that are located in CDFI Investment Areas, as defined in 12 C.F.R. § 1805.201(b)(3)(ii).

Eligible business entity types that may qualify for the LED SSBCI Programs are entities that have an eligible business purpose and are structured as one of the following: For-Profit Corporation; Limited Liability Company; Partnership; Joint venture; Sole proprietorship

According to the U.S. Treasury SSBCI Capital Program Guidance, an acceptable eligible business purpose includes, but is not limited to, start-up costs, working capital, business procurement, franchise fees, equipment, inventory, as well as the purchase, construction renovation or tenant improvements of an eligible place of business that is not for passive real estate investment purposes.

Each LED SSBCI MLP Lender will identify the loan opportunity, underwrite the loan and structure each loan based on the qualifications of the borrower using the lender’s credit policies. However, loan transactions between $50,000 and $100,000 shall require collateral according to the LED SSBCI MLP program rules.

The following business activities are ineligible for participation in the LED SSBCI Programs: Restaurants, grills, cafes, fast food operations, motorized vehicle, trailer, curb-side, sidewalk or street vendor food operations that have been in business less than 2 years; Bars, saloons and other businesses established for the principal purpose of selling or distributing alcohol; Gaming or gambling; Pyramid sales; Financial services; Speculative real estate; Owner to owner buyouts; Refinancing; Recreational Park, theme park, amusement park, or camping facility; A business engaged in activities that are prohibited by federal law to include direct and indirect marijuana businesses.

The U.S. Treasury SSBCI Capital Program Guidance allows lenders to charge a program fee or loan fee of up to $500 on loan transactions less than $25,000. Program fees for loans greater than $25,000 will be capped at 2%.

The LED SSBCI MLP application fee is $100 but may be waived at the discretion of LEDC.

Under the LED SSBCI MLP, the minimum job requirement is one new permanent full-time job created or retained.

Typically, start-ups are defined as a business in the early stages of operations (less than three years). A listing of eligible and ineligible business types may be found in the LED SSBCI Program rules.

Start-ups are allowed under the LED SSBCI MLP under certain conditions. Please refer to the LED SSBCI MLP rules for eligible and ineligible business types.

At the time of obligation, the interest rate on all MLP loans or lines of credits is to be negotiated between the lender and borrower, but shall not exceed the National Credit Union Administration’s (NCUA) interest rate ceiling for loans made by federal credit unions as described in 12 U.S.C. §1757(A)(vi)(I) and set by the NCUA board. Further, on all loans or lines of credits, the interest rate shall not exceed the lesser interest rate of either: the National Credit Union Administration (NCUA) interest rate ceiling; that established by the Federal Credit Union Act (FCUA); that established by the Office of the Comptroller of the Currency (OCC); or applicable state legislation that may be enacted.

Yes, a borrower may apply to multiple LED SSBCI programs so long as the borrower meets the program and lender eligibility requirements. However, the prohibition of duplication of benefits still applies to all LED SSBCI Programs.

The retained job numbers are certified by the company at the time of application. It is intended to capture the number of full-time and part-time jobs at the company at the time of application in order to assess the size of the company applying for the SSBCI program, not to ascertain whether the company is in jeopardy of downsizing or closing.

Go to the CDFI Fund website at www.cdfifund.gov/cims3. Click the blue CDFI button located under the map (a map will populate). Under the filter for “LAYERS” in the top left corner of the site, ensure you have selected 2020 CDFI Tract. At the top left, enter the address and click Enter. Select the correct address from the drop down and a map including your address will appear. Select the shaded green area that populates after entering the address, a box will appear with geographical demographic status and will indicate Yes or No if the physical address entered falls in a designated Investment Area (IA).

Yes, the borrower may be a non-profit entity as long as the non-profit entity has an eligible SSBCI business purpose as defined in the U.S. Treasury SSBCI Capital Guidance and LED SSBCI MLP rules. (12 U.S.C. § 5704(e)(7)(A)(i)(III)).

No, the additional truck purchase would not be a duplication of benefits. The business purpose in this example would be for the expansion of delivery/transportation services provided by the company. Under a scenario such as this, thorough documentation is recommended to explain the reason for the subsequent loan.

To date, there are six (6) approved LED SSBCI MLP lenders.

There is no maximum amortization period. The amortization is based on the lender’s credit policy. However, the Micro Loan Program revolving loan fund participation ends five years after the loan closing date.

Yes, a borrower under probation related to criminal convictions is eligible to participate in any SSBCI program. If the applicant/borrower or his/her/its principle management has a criminal record of convictions for any violations other than misdemeanor traffic violations in which the applicant has not been reinstated into society, the borrower would then be deemed ineligible.

The Micro Loan Program has an enrollment application. Business owners interested in applying for a Micro Loan should contact a participating lender.

The Micro Lending Program provides loans as small as $1,000 up to $100,000 in order to meet the smaller financing needs of small businesses to either start up or expand. The average micro loan is about $13,000.

To be eligible, a business must be located in Louisiana and have less than 100 employees. Some types of businesses are NOT eligible. For more information, visit the Micro Lending Program page and click on the Eligibility tab. Please note that application process and requirements of each LED Preferred Lender offering the Micro Lending Program may vary; therefore, an applicant is encouraged to also discuss their loan needs with one of the participating Micro Lenders here.

Micro loans can be used for a variety of purposes that help small businesses start or expand. Micro loans are ideal when you need less than $100,000 to start, rebuild, re-open, repair, enhance or improve your small business. Examples include:
• Working capital
• Inventory
• Supplies
• Furniture
• Fixtures
• Machinery
• Equipment
• Startup financing

For a list of participating LED Preferred Lenders offering the Micro Loan Program please visit the providers tab on Micro Lending Program page.

Participation in the Micro Lending Program requires completion of an RFQ (Request for Qualifications) process and approval by the Louisiana Economic Development Corporation (LEDC) board. Applicants are evaluated on a variety of criteria, including location. Program participation remains an open process, with future RFQ’s anticipated. No new RFQ’s have been scheduled at this time. If your lender is interested in becoming an LEDC-approved Micro Lender please have the lender email LEDSSBCI2@la.gov.

The interest rates, equity, collateral and other loan terms are negotiated between the borrower and the lender; however, the maximum loan term offered under the MLP is five years.

The lender will complete the loan application, underwrite the loan application and request any supporting documentation to complete that process; individual requirements will vary based on the lender’s credit policy.

No, loan proceeds from an MLP loan cannot be used to pay existing debts.

Any insured bank, insured credit union or insured community development financial institution in the state may participate in the Louisiana SSBCI Loabn Guaranty Program by formally opting into the program. LED Preferred Lenders have taken additional steps to demonstrate that they meet all eligibility requirements and have an active interest in Louisiana SSBCI program loan programs. Upon completion of the preferred lender process, participating lender names, points of contact and website links will be posted in the LED Preferred Lender tab of the Loan Guaranty Program page.

The lender will underwrite the Small Business Loan Guaranty application and request any supporting documentation to complete that process; however, the minimum program requirements are:
• 15% equity
• Collateral (excluding a personal residence)
• Cash Flow Ratio of 1.25 to 1.00

The specific length of time varies depending on the guaranty amount bring requested and other factors. Generally speaking, the application and approval process for guaranty applications less than $500,000 should take weeks, not months, to complete.

• Revolving lines of credit
• Startups
• Acquisitions
• Fixed assets purchases
• Purchase or construction of building (limited to 51% applicant occupancy)

• Restaurants that have been in operations less than 2 years
• Bars and saloons
• Gaming businesses
• Real estate speculations
• Recreational, theme park, amusement parks or camping facilities
• Pyramid sales
• Funding activities related either directly or indirectly to cryptocurrency
• Refinancing
• A business engaged in activities that are prohibited by federal law to include direct and indirect marijuana businesses.

As per the U.S. Treasury SSBCI Capital Guidance Conflict of Interest Standards, under the LED SSBCI equity programs, the entrepreneur must not be an executive officer, director or principal shareholder of the financial institution provider; a member of the immediate family of an executive officer, director or principal shareholder of the financial institution provider; or a related interest of any such executive officer, director, principal shareholder or member of the immediate family.

The provider must be registered and authorized to conduct business in Louisiana and maintain an office in Louisiana to participate in the LED SSBCI programs. Any equity transaction made to an entrepreneur or small business outside of Louisiana must first be evaluated and reviewed by LED.

According to the U.S. Treasury SSBCI Guidance, a CDFI Investment Area is defined as a geographic unit (or contiguous geographic units), such as a census tract, located within the United States, that meets at least one of the following criteria: • Has a population poverty rate of at least 20 percent. • Has an unemployment rate 1.5 times the national average. • For a metropolitan area, has a median family income (MFI) at or below 80 percent of the greater of either the metropolitan or national metropolitan MFI. • For a non-metropolitan area, has an MFI at or below 80 percent of the greater of either the statewide or national non-metropolitan MFI. • Is wholly located within an Empowerment Zone or Enterprise Community. • Has a county population loss greater than or equal to 10 percent between the two most recent census periods for metro areas or five percent over last five years for non-metro areas.

Go to the CDFI Fund website and take the following steps: • Click the blue CDFI button located under the map. • Under the filter for “LAYERS” in the top left portion of the site, ensure you have selected “2020 CDFI Tract.” • At the top left, enter the address and click Enter. Select the correct address from the drop-down menu and a map including your address will appear. • Select the shaded green area that populates after entering the address. A box will appear with geographical demographic status and will indicate Yes or No if the physical address entered falls in a designated Investment Area (IA).

As defined by the U.S. Treasury SSBCI Guidance, a VSB is a business with fewer than 10 employees at the time of the transaction and includes independent contractors and sole proprietors.

As defined by the U.S. Treasury SSBCI Guidance, SEDI is any of the following: 1) Business enterprises that certify that they are owned and controlled by individuals who have had their access to credit on reasonable terms diminished as compared to others in comparable economic circumstances, due to their membership of a group that has been subjected to racial or ethnic prejudice or cultural bias within American society; gender; veteran status; limited English proficiency; physical handicap; long-term residence in an environment isolated from the mainstream of American society; membership of a federally or state-recognized Indian tribe; long-term residence in a rural community; residence in a U.S. territory; residence in a community undergoing economic transitions (including communities impacted by the shift towards a net-zero economy or deindustrialization); or membership of another “underserved community” as defined in Executive Order 13985; (2) Business enterprises that certify that they are owned and controlled by individuals whose residences are in CDFI Investment Areas, as defined in 12 C.F.R. § 1805.201(b)(3)(ii); (3) Business enterprises that certify that they will operate a location in a CDFI Investment Area, as defined in 12 C.F.R. § 1805.201(b)(3)(ii); or (4) Business enterprises that are located in CDFI Investment Areas, as defined in 12 C.F.R. § 1805.201(b)(3)(ii).

Eligible business types that may qualify for the LED SSBCI programs are entities that have an eligible business purpose and are structured as one of the following: • For-profit corporation • Limited liability company • Partnership • Joint venture • Sole proprietorship

According to the U.S. Treasury SSBCI Capital Program Guidance, an acceptable eligible business purpose includes, but is not limited to, start-up costs, working capital, business procurement, franchise fees, equipment or inventory, as well as the purchase, construction, renovation or tenant improvements of an eligible place of business that is not for passive real estate investment purposes.

Ineligible business activities in the LED SSBCI programs may include, but are not limited to: • Speculative real estate • Lending activities • Pyramid sales • Activities prohibited by federal law or local jurisdiction • Gambling • Bars • Refinancing

Job creation and retention are encouraged and documented.

Typically, start-ups are defined as a business in the early stages of operations (less than three years). A listing of eligible and ineligible business types can be found in the LED SSBCI program rules.

Yes, an entrepreneur may pursue multiple LED SSBCI programs as long as they meet the program eligibility requirements and does not duplicate benefits across programs.

Yes, a provider can participate in more than one LED SSBCI program so long as the provider meets eligible provider criteria under each program and does not duplicate benefits across programs. However, only the providers having undergone the RFQ process and approved by the LEDC board may offer the LED SSBCI Micro Lending Program.

Retained job numbers are required in order to assess the size of the company applying for the SSBCI program. The information is not necessarily indicative that the company is in jeopardy of downsizing or closing.

Yes, as long as the non-profit entity has an eligible SSBCI business purpose as defined in the U.S. Treasury SSBCI Capital Guidance and LED SSBCI rules. [12 U.S.C. § 5704(e)(7)(A)(i)(III)].

Yes, an entrepreneur or applicant under probation related to criminal convictions is eligible to participate in any SSBCI program. If the entrepreneur, applicant or principal management has a criminal record showing convictions for any criminal violations other than misdemeanor traffic violations in which the applicant has not been reinstated into society, the entrepreneur/applicant would then be deemed ineligible.

Equity providers have a rigorous review process and have executed agreements to invest into eligible small businesses. Entrepreneurs interested in applying for an investment should contact a participating provider.

A business may participate in both the LED SSBCI Seed Capital/Venture Capital Program and the LED Angel Investor Tax Credit Program (AITCP). However, any limited partners and/or members to the equity fund having used capital under the State Small Business Credit Initiative (SSBCI) Program from LEDC during an investment round are not eligible for AITCP. If LEDC is a limited partner or member of a Seed/Venture capital fund and is investing SSBCI capital into the fund, it is referred to as a SSBCI Fund and must comply with all U.S. Treasury SSBCI Guidance. In order to comply, LEDC Investment shall be made on no less than the same terms and conditions, and with the same expected return on investment, as other private investors. LEDC, which is a department of LED, is a state entity that does not incur a state tax liability nor is eligible to earn state tax credits. Therefore since LEDC is not eligible for AITC, any transaction that includes LEDC (with SSBCI capital) as a partner or member of the fund is deemed in-eligible for AITC.

A loan is private financing that must be repaid with interest typically applied to the amount financed over a specified period of time. Seed or VC funds provide an investment into the business from an outside party in exchange for ownership in the business over a defined period of time.

Investments may be made by the purchase of common stock, preferred stock, partnership rights, or other equity investment. In addition, private financing structured as an equity investment may be structured as debt positions, which may act as equity or have equity features such as subordinated debt, debentures or other such instruments used in conjunction with features intended to yield significant capital appreciation.

Seed Capital Program financing must contribute to the creation or growth of a startup or early-stage business. Venture Capital Program financing must contribute to the expansion of a small business. Additional eligibility requirements may vary by fund.

If you are a startup looking for funding, please visit our Seed Capital funds page. If you are an existing small business looking to expand, please see our Venture Capital funds page for groups/funds.