Kentucky will receive a $117 million award to expand access to money for small businesses across the state through the U.S. Department of Treasury’s State Small Business Credit Initiative, according to an announcement from the governor’s office.
The award will be allocated in three phases over 10 years to launch a suite of initiatives known as the Kentucky Small Business Credit Initiative 2.0. The funding will support venture capital programs, loan support programs and Community Development Financial Institutions, with an emphasis on access for underserved business owners.
“These funds are a boost for businesses still recovering from the pandemic, but also represent a potential watershed for the future of innovative businesses in our state,” said Gov. Andy Beshear.
The funding will be distributed through KY Innovation, the office within the Cabinet for Economic Development responsible for supporting entrepreneurs and small businesses.
Qualifying businesses can access support through certified lending institutions for the loan programs and Keyhorse Capital, the venture funding arm of the Kentucky Science and Technology Corporation, for investment capital.
“Back in 2010, Kentucky used these SSBCI dollars to increase loan security and saw tremendous success,” said Monique Kuykendoll Quarterman, executive director of KY Innovation. “These funds enable us to build upon that success by strengthening that loan capital program and investing heavily into our venture capital community.”
The state plans to allocate the award toward areas KY Innovation has identified as lacking within its startup network.
A significant portion of KSBCI 2.0 funding will be allocated toward venture capital, which has been identified as a key area of need for Kentucky startups.
In addition to funding more businesses owned by socially and economically disadvantaged founders, Keyhorse will create educational programs to foster a new generation of venture capital fund managers and give them the resources needed to be successful in Kentucky’s growing venture capital community.
“This significantly increases the capital available to promising businesses at critical early stages and helps lay the foundation for Kentucky’s innovative economy of the future,” Beshear said. “We must also acknowledge that while the talent and energy of our entrepreneurs and small-business owners are unmatched, the opportunity has not existed in equal measure.”