Have a question? We’re here to help.
Help LED support your efforts to access SSBCI funds by emailing your general or program-specific questions to LEDSSBCI2@la.gov. Answers to the most frequently asked questions to date appear below; we’ll continuously update this page as additional FAQs come in.
General Program Questions
Can my business get a grant from SSBCI?
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.
Who should entrepreneurs contact first if they want to apply?
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.
When can business owners and investors begin applying for SSBCI support?
Application for SSBCI support can be made starting in April 2023.
Collateral Support Program FAQs
Can I qualify for the program if I don’t have any collateral?
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.
What is the difference between Collateral Support and Loan Guaranty?
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.
What is an eligible business purpose under the CSP?
• Lines of Credit
• Fixed asset purchases
• Purchase or construction of building (limited to 51% owner occupied)
How do I get a list of participating CSP lenders?
If you are a small business with a shortfall of collateral, please visit our Collateral Support Program page.
What if my current lender is not familiar with the SSBCI CSP?
Lenders wishing to opt-in to SSBCI’s CSP program may contact LED for more information by emailing LEDSSBCIcollateral@la.gov.
What are the loan terms offered under the CSP?
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.
Can LED recommend a bank or lending institution to take my collateral support program application?
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.
Micro Lending Program FAQs
What is a micro loan?
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.
Is my business eligible for a micro loan?
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.
How do I use a micro loan?
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
• Startup financing
How do I get a list of participating lenders?
For a list of participating LED Preferred Lenders offering the Micro Loan Program please visit the providers tab on Micro Lending Program page.
What if my current lender is not on the participating lenders list?
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.
What are the micro loan terms?
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.
What do I need to apply?
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.
Can I refinance existing debt?
No, loan proceeds from an MLP loan cannot be used to pay existing debts.
Small Business Loan Guaranty FAQs
Can LED recommend a bank or other financial institution to take my Small Business Loan Guaranty Program application?
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.
What are the credit requirements Loan Guarantee Program?
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
How long does the application and approval process take?
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.
What is an eligible business purpose under the Small Business Loan Guaranty Program?
• Revolving lines of credit
• Fixed assets purchases
• Purchase or construction of building (limited to 51% applicant occupancy)
What types of businesses and business activities are not eligible in the Small Business Loan Guaranty Program?
• 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
• A business engaged in activities that are prohibited by federal law to include direct and indirect marijuana businesses.
Seed and Venture Capital FAQs
What is the difference between a loan and equity financing offered under programs such as Seed or VC programs?
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.
What type of equity investments are offered under the Seed or VC programs?
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.
What types of financing are eligible under the Seed and VC?
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.
How do I get a list of participating funds?
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.