Hawai‘i to Receive $62M In American Rescue Plan Funding
The Hawai‘i Technology Development Corporation, HTDC, announced this week that the State of Hawai‘i’s application has been approved by the U.S. Treasury for the State Small Business Credit Initiative, a program that was part of the American Rescue Plan Act of 2021.
The SSBCI program brings to Hawai‘i up to $62 million in federal funding to expand access to capital for small businesses, startups, and entrepreneurs. Hawai‘i is among the first states in the nation to be approved for participation.
“This is a valuable addition to the state’s economic revitalization efforts and provides much needed support for our businesses to not just recover but grow post-pandemic. We anticipate the creation of high-quality jobs for our residents as a result of this program.” said Gov. David Ige.
HTDC, a state agency attached to the State Department of Business, Economic Development and Tourism (DBEDT) is the lead for the program and has partnered with the Hawai‘i Green Infrastructure Authority, a division within DBEDT to jointly administer this program, known as the ‘Hawai‘i Small Business Capital Program’ (HI-CAP).
“Receiving federal funding that requires private matching funds will provide needed capital to our small business communities. It gives us a way to engage and continue strengthening our efforts toward diversifying our economy”, added Mike McCartney, Director of DBEDT.
The funds will be released in three tranches, with a first tranche of $19.8 million. Additionally, with the program requiring investment from the private sector, it is expected that more than $600 million in matching private investments will be injected into Hawai‘i’s economy.
“The COVID-19 pandemic was devastating for businesses and entrepreneurs in states like Hawaii, whose economy relies heavily on tourism. That’s why these investments through the American Rescue Plan are so critical,” said Deputy Secretary of the Treasury Wally Adeyemo. “Hawaii’s plan will help diversify its economy and spark innovation in key sectors, including renewable energy, to promote economic growth. Treasury will continue working with Hawaii to help make sure this capital is having maximum impact in communities across the state.”
“We are very appreciative of all of the state’s support for HI-CAP, including an appropriation from the legislature this year. This will greatly strengthen HTDC’s mission to accelerate business growth with local innovation,” shared Len Higashi, acting Executive Director of HTDC.
There will be four types of offerings within HI-CAP available to Hawai‘i small businesses:
‘HI-CAP Collateral’ will have the State working with local financial institutions to provide collateral to small businesses where financing may be difficult or help them secure better terms.
HI-CAP Loans is a state administered program that will directly lend to businesses for catalytic projects that have community impact. Projects include, but are not limited to, renewable energy, innovation, local agriculture, dual-use technology, manufacturing, or creative industry projects that spur economic development.
HI-CAP Community Development Financial Institution (CDFI) Loan Pool Program is designed to work with Hawai‘i CDFIs in providing loan capital to lend to very small businesses and provide small loans including micro loans. This program will provide much needed loan capital to Hawai‘i’s CDFI network, including underserved small businesses.
HI-CAP Invest will be a Fund-of-Funds Venture Capital Program that is a continuation of the successful SSBCI 1.0 HSDC Venture Capital Investment Program. The program is designed to invest in high quality investment managers with the capacity to mentor and advise entrepreneurs and facilitate follow-on investments.
HI-CAP is expected to run until Sept. 30, 2030.