The state of Indiana has received some federal funding, which it says is designed to expand access to and increase capital for entrepreneurs, startups and small businesses.
The Indiana Economic Development Corp. said the state will receive up to $99.1 million in federal funding through the State Small Business Credit Initiative.
“As a state, Indiana is strategically focused on creating the economy of the future and investing in the jobs of tomorrow and taking Indiana’s Top 40 Global Entrepreneurship Ecosystem to a Top 5 Ecosystem is an essential goal of that initiative,” said Indiana Secretary of Commerce Brad Chambers. “This SSBCI award will inject critical funding and resources into our ecosystem of current and future entrepreneurs, startups and small businesses who are solving global challenges, creating new technologies, and positively impacting Hoosier communities statewide.”
Indiana is one of the first 14 states and territories to be approved by the U.S. Department of Treasury for SSBCI funds, a program established in 2010 and reauthorized and funded through The American Rescue Plan Act in 2021. The money, which must be disbursed alongside private dollars, is expected to leverage $10 in follow-on investment for each $1 of SSBCI.
Indiana will receive a minimum of $86 million and will be eligible to receive another $13 million – for a total of $99 million over 10 years, the state said. Indiana will leverage SSBCI to expand venture capital investments and create a new program to invest in small business loan funds throughout the state.
At least 37% of this funding will be allocated to traditionally underserved small businesses and entrepreneurs, encouraging greater equity in access to capital for Hoosier businesses.
The state said about $70 million of the funding will be directed to accelerating Indiana’s innovative startup ecosystem through direct investments in early-revenue companies. This allocation will significantly expand Indiana’s ability to support pre-seed and seed funding rounds through Elevate Ventures, Indiana’s venture development partner, increasing access to working capital for innovators, entrepreneurs and startups.
This allocation will be invested in Indiana-based companies through the Indiana Angel Network Fund alongside co-investors, with a strategic effort to participate in early funding rounds led by venture capital partners strategically focused on reaching underrepresented founders.
These investments will be available to Indiana-based companies pursuing seed stage financing, meaning they are typically pre-revenue, preparing for clinical trials or regulatory approval, or actively pursuing product-market fit through initial go-to-market activities. Investments from the Indiana Angel Network Fund, which may be made up to $1 million, require a minimum 1:1 co-investment.
The IEDC will leverage $28 million of SSBCI funding to create a new small business loan fund investment program to provide more capital for entrepreneurs and small businesses, particularly for those that have been historically underserved. Through the program, loan funds that provide debt capital for qualified purposes to Indiana-based small businesses will be eligible to have a portion of those loans purchased by the IEDC, enabling the loan funds to then support more entrepreneurs and small businesses.
Additional information on the program is available on the IEDC’s website.