Ed. Note: Cross posted from the SBA's Open for Business blog
Startups and “high-growth” small businesses are responsible for the lion’s share of net new job creation in the U.S. each year. That’s a key reason that we launched an Administration-wide effort called Startup America earlier this year.
As a critical part of that, SBA made a commitment to invest up to $1 billion in underserved communities and emerging sectors over the next 5 years.
Today, we were delighted to announce the first public-private partnership of this Impact Investment Fund. This first effort will focus on growing businesses in Michigan.
First, the need is there. Unemployment is high in Michigan, with over 90% of counties in economic distress as defined by the Commerce Department. It’s an economy in transition.
Second, the opportunity is there. Michigan has one of the highest engineers-per-capita of any state. It also has a well-trained workforce with great universities. Many high-growth firms in Michigan simply need more capital to grow, scale up and hire.
We also saw a number of key players who shared a vision for greater entrepreneurship and growth in Michigan, including experienced investors who already had a track record of investing in small businesses across the state.
Through this new partnership with Michigan Growth Capital Partners and Michigan-based Dow Chemical Company, we can leverage even more money into Michigan’s small businesses – up to $130 million, with up to $80 million coming from SBA. And, importantly, this SBA program is subsidy-neutral, so we can do it at no cost to taxpayers.
At a time when even the most promising small businesses face challenges getting access to capital, the Impact Investment Fund is a great example of a public-private partnership that is stepping in to meet a critical need. We look forward to announcing more partners in the future in other regions and sectors.