Dakota Business Lending is now an approved participating lender for the Montana State Small Business Credit Initiative 2.0 Loan Participation Program (MT SSBCI 2.0 LPP). The federal program is administered by the U.S. Department of Treasury.
The American Rescue Plan Act (ARPA) of March 2021 funded the SSBCI with the intent to provide support and relief to small business owners hurt by the pandemic as they work to build, grow, and adapt, as well as foster job creating opportunities for the local economy. The SSBCI has also set out to help underrepresented small business owners with access to capital. Funding can only be used for business purposes including working capital, equipment, inventory, start-up costs, and the purchase, construction, or renovations of owner-occupied real estate.
The program requires Certified Development Financial Institutions (CDFI) such as Dakota Business Lending (DBL) to partner with an approved lender (bank) for up to 50% of the loan amount. The borrower will just have one lender as the bank will handle the servicing of the loan and DBL will be a silent participating partner. There is an opportunity for DBL to serve as both the bank and the CDFI when SSBCI is used in conjunction with other revolving loan funds also available through DBL.
Businesses in Montana with less than 750 employees can be eligible for SSBCI funding. Through the program, businesses can access up to $1 million for qualifying expenses. DBL will offer a low interest rate ranging between 0.5%-3% on their portion of the project, determined by term and payments on the lead lender loan as defined in the program requirements. There are no prepayment fees, and collateral is required to be shared on pro-rata basis in first lien position. Upfront fees or charges paid by the small business, excluding fees to the state program, that exceed 2% for loans greater than $25,000 or $500 for loans under $25,000.
After seeing a major gap in the market for delivery of complementary financing programs, DBL secured statewide authority to deliver the SBA 504 program in 2018. In September 2022, DBL announced the expanded availability of several of their revolving fund programs. With the addition of the SSBCI program, DBL is positioned to provide a large variety of financing options to businesses across the entire state Montana to help businesses start, grow and succeed.
DBL is now accepting applications and will administer funds according to program availability. For more information on the program or to start an application, visit our webpage or contact Christie Williams (cwilliams@dakotabusinesslending.com, 406-760-1002) or Jason Gerdes (jgerdes@dakotabusinesslending.com, 406-760-1003).