Frequently Asked Questions:
SSBCI Providers

• How can I participate in SSBCI’s Collateral Support (CSP) and Loan Guaranty programs?

  Any insured depository bank, insured depository credit union or insured depository community development financial institution in the state may participate in the Louisiana SSBCI’s Collateral Support Program (CSP) and Small Business Loan Guaranty Program (SBLGP) by opting in.

  Lenders seeking more information about CSP participation may contact LED by emailing LEDSSBCIcollateral@la.gov.

  Lenders seeking more information about SBLGP participation may contact LED by emailing LEDSSBCILoanGty@la.gov.

• How do I become an LED Preferred Lender?

  LED Preferred Lenders are loan program participants who have completed the registration process, entitling them to receive additional promotional support on LED’s digital platforms. Become an LED Preferred Lender by downloading the online application here.

• How can I participate in the Micro Lending, Seed Capital and Venture Capital programs?

  Participation in the Micro Lending, Seed and Venture Capital programs requires completion of an RFQ (Request for Qualifications) process and approval by the Louisiana Economic Development Corporation (LEDC) Board of Directors. Applicants are evaluated on a variety of criteria, including location. 

  In response to the initial program RFQ, six lenders were approved for the Micro Lending Program and more than 20 funds were approved for the Seed and Venture Capital funds. 

  Program participation remains an open process, with future RFQ’s anticipated. No new RFQ’s have been scheduled at this time. To get an idea of the information requested, please review the 2022 Micro Lending Program RFQ and the 2022 Seed and Venture Capital Program RFQ.

  Funds wishing to participate in SSBCI equity programs should sign up for small business email updates by clicking here.

  As new funds and lenders are accepted into the program and grant LED permission to promote their participation, their contact information and website links will be added to the Micro Lending and Equity Programs pages of this website. 

  For more information about becoming an LEDC-approved Micro Lender or equity program participant, email LEDSSBCI2@la.gov.

• Does the lender use their internal application and forms or does LED have a Micro Loan Program application and forms to provide?

  Participating lenders will use the LED Micro Loan Enrollment Application. Lenders interested in participating in the Micro Loan Program must undergo the RFQ process and be approved by the LEDC Board of Directors.

• Are lenders allowed to make exceptions to their credit policies on SSBCI MLP loan transactions?

  Yes, lenders can make exceptions to their usual credit policies, so long as the exceptions are reasonable and do not violate any of LED or U.S. Treasury SSBCI guidelines. For example, the exceptions cannot waive the LED collateral requirement for loans over $50,000 or rules regarding use of a personal residence as collateral.

Micro Lending Provider FAQs

• Are lenders allowed to make exceptions to their credit policies on SSBCI MLP loan transactions?

  Yes, lenders can make exceptions to their usual credit policies, so long as the exceptions are reasonable and do not violate any of LED or U.S. Treasury SSBCI guidelines. For example, the exceptions cannot waive the LED collateral requirement for loans over $50,000 or rules regarding use of a personal residence as collateral.

• In regards to the sex offender certification, how can the lender ensure there aren’t findings in other states, etc., prior to signing the certification?

  Lender compliance is based on the date of the transaction. The lender must attest to the best of its knowledge that the borrower is not a registered sex offender. Neither the U.S. Treasury SSBCI Capital Guidance nor LED program rules require that a lender independently verify the certified sex offender status of covered principals. However, the lender should ensure the certification is executed before funds are disbursed.

• Can the borrower have multiple loans of $100,000? If the borrower has two separate entities, what is the max per borrower?

  Yes, a borrower can have multiple loans for separate entities. However, the maximum principal amount is $500,000 for the program’s life per borrower.

• Can the lenders extend credit to borrowers outside of their territory?

  Yes, lenders can use their own credit policies to establish the lending geography (territory) within Louisiana, provided that the transaction abides by the U.S. Treasury SSBCI guidance and LED SSBCI MLP rules. Any loan transaction made to a business outside of Louisiana must first be reviewed and evaluated by LED and be in accordance with U.S. Treasury SSBCI Capital Guidance.

• If a lender’s standard fees are lower than the fees authorized in the program rules, is the lender able to charge its standard fees or should they adopt the SSBCI guidance as it relates to Lender Fees?

  The fee structure is at the discretion of the lender so long as the fee charged to the small business does not exceed the maximum allowed under the U.S. Treasury Capital Guidance and LED SSBCI MLP rules.

• Will the funds coming from the state subordinate to the lender funds?

  These details will be provided in the program agreement.

• Can a lender participate in multiple programs?

  Yes, a lender can participate in more than one LED SSBCI Program so long as the lender meetings the eligible lender criteria under each program. However, only lenders having undergone the RFQ process and approved by the LEDC Board of Directors may participate in the LED SSBCI Micro Lending Program. Further, the prohibition of duplication of benefits still applies across all LED SSBCI Programs.

• Can the lender charge a prepayment penalty on an SSBCI loan?

  No, prepayment penalties are prohibited under SSBCI per U.S. Treasury Capital Guidance.

• Are SSBCI Loan Programs forgivable?

  No, the LED SSBCI Loan Programs are not forgivable loans.

• Do SSBCI Insider guidelines apply to spouses and other immediate family members (brothers, sisters, sons, daughters)?

  As per the U.S. Treasury SSBCI Capital Guidance Conflict of Interest Standards, under the LED SSBCI  Micro Loan Program, the borrower must not be — (aa) an executive officer, director, or principal shareholder of the financial institution lender; (bb) a member of the immediate family of an executive officer, director, or principal shareholder of the financial institution lender; or (cc) a related interest of any such executive officer, director, principal shareholder, or member of the immediate family.

Seed and Venture Capital Provider FAQs

• Does the equity provider use its internal application process or does LED provide application forms?

  The participating providers will use their own process to perform due diligence. Providers interested in participating in either the Louisiana Seed Capital Program or the Louisiana Venture Capital Program must complete the RFQ process and be approved by the Louisiana Economic Development Corp board.

• How are start-ups defined?

  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.

• What types of business activities are ineligible?

  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
• What is an acceptable eligible business purpose?

  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.

• What types of businesses are eligible to participate?

  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
• What is a Socially & Economically Disadvantaged Individual (“SEDI”) owned business?

  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 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;
  • 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. § 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 F.R. § 1805.201(b)(3)(ii).

   

• How is Very Small Business (VSB) defined?

  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.