- Details
- By Chez Oxendine
- Finance
Officials from the United States Treasury plan to announce more than $86 million in State Small Business Credit Initiative (SSBCI) funding for two dozen tribal governments during the White House Tribal Nations Summit today.
The new funding amounts for tribes are in addition to $73 million announced in June of this year, targeting 39 tribal governments.
Overall, the Treasury has approved 33 tribal applications representing 63 tribal communities and more than $159 million in funding this year through the SSBCI program. The funding represents the largest-ever single investment in Native small businesses by the federal government, a Treasury spokesperson said in a statement to Tribal Business News.
The SSBCI funding is structured to have a multiplier effect on small-business development and growth in Native communities. Every $1 of SSBCI capital funding is expected to “catalyze” up to $10 of private investment, amplifying the effects of the funding and providing small businesses with resources for growth, according to U.S Treasurer and lifetime Mohegan Chief Lynn Malerba.
“Small businesses, whether Tribally owned or individually owned, are critical to creating jobs and growing Tribal economies,” Malerba told Tribal Business News. “Tribal businesses also lift up the local economy by purchasing goods and services from other local businesses and by providing employment for local residents in addition to Tribal citizens. We expect to see hundreds of Tribal and Native small businesses expand through these awards.”
Pete Upton, CEO of the Native CDFI Network, praised the Treasury for finding ways to make SSBCI work for Indian Country and emphasized the multiplier effect it would have on Native economies because of the program's matching requirements. All jurisdictions, including tribes, must match SSBCI funds with private capital and aspire to leverage each dollar to attract 10 dollars in private financing.
“These are historic amounts of capital that are flowing into Indian Country,” Upton told Tribal Business News. "Leveraging that money is going to have a huge impact on Native communities, especially the tribal citizens who are entrepreneurs. SSBCI is going to increase their ability to get financing for small businesses tremendously.”
The grantees in the latest SSBCI funding announcement include:
- Akiak Native Community ($647,715)
- Cachil DeHe Band of Wintun Indians of the Colusa Indian Community ($615,724)
- Caddo Nation of Oklahoma ($1,492,267)
- Cahuilla Band of Indians ($ 646,299)
- Cheyenne River Sioux Tribe of the Cheyenne River Reservation ($4,937,944)
- Comanche Nation, Oklahoma ($3,882,828)
- Lac Courte Oreilles Band of Lake Superior Chippewa Indians of Wisconsin ($1,819,907)
- Little Shell Tribe of Chippewa Indians of Montana ($6,454,026)
- Miccosukee Tribe of Indians ($656,963)
- Minnesota Chippewa - Bois Forte Band ($904,480)
- Minnesota Chippewa - Fond Du Lac Band ($956,633)
- Minnesota Chippewa - Grand Portage Band ($695,786)
- Minnesota Chippewa - White Earth Band ($3,883,494)
- Omaha Tribe of Nebraska ($1,535,581)
- San Pasqual Band of Diegueno Mission Indians of California ($620,889)
- The Choctaw Nation of Oklahoma ($44,981,736)
- The Seminole Nation of Oklahoma ($4,139,833)
- Turtle Mountain Band of Chippewa Indians of North Dakota ($7,245,207)
Some tribes are banding together to maximize the impact and efficiency of the funding opportunity SSBCI represents for Native communities.
The Native American Development Corporation (NADC) in Billings, Montana, will work with lead tribal applicant Little Shell Band of Chippewa and six other tribes to ensure roughly $6.5 million helps spin up new businesses and supports potential mergers and acquisitions — a popular route for tribes looking to break into federal contracting, per prior Tribal Business News reporting.
Through the same funding, NADC will also provide funding to the Cahto Tribe of the Laytonville Rancheria in California, the Chippewa Cree in Montana, the Delaware Nation in Oklahoma, the Kashia Band of Pomo Indians in California, the Lower Brule Sioux Tribe in South Dakota, and the Nansemond Indian Nation in Virginia.
NADC’s Development Director Sue Taylor said most of the funding would likely go to tribal enterprises, given a dollar-for-dollar matching requirement that necessitates at least some non-federal funding accompanying the loan funds for the final awardee. Still, individual entrepreneurs are encouraged to apply, Taylor said.
“I think the scale of this money and the fact you need to have the match makes it more likely to go to an enterprise, and tribal enterprises are in a good position to either create or maintain jobs,” Taylor told Tribal Business News.
The focus on tribal enterprises should help put the money to work quickly, which is key for the longer term, she said.
“This is a 10-year program. We want to get (the funds) out the door, we want to deploy it as soon as possible, because that helps get the money started, and as it is paid back, the money begins to revolve to a third or fourth borrower down the line.”
The ability to continually recycle the SSBCI funds to Native businesses creates change and impact in the communities where it circulates, Taylor said.
“It really is a way to bring parity and impact to Native finance,” Taylor said. “This is very much a positive step forward.”
The SSBCI funding was announced alongside the release of a 255-page report titled Increasing Community Economic Development and Deployment of New Market Tax Credits in Indian Country, which focuses on the chronic lack of access to credit in Native communities as a major barrier to economic development.
The report is the latest production by the Federal Initiative on Access to Capital in Indian Country, which has pulled multiple agencies in to develop solutions to the problem, per the report’s introduction.
Phase 1 of the program has included measures like involving tribes with SSBCI funding, or outreach for existing financial programs through the Bipartisan Infrastructure Law, the CHIPS and Science Act, and the Inflation Reduction Act.
This publication marks the beginning of Phase 2 of the initiative, which will focus on identifying specific barriers to credit access, as well as determining effective solutions to those problems.
In particular, the report discusses the impact and potential uses of the New Markets Tax Credit (NMTC) program, which incentivizes investment in economically disadvantaged communities by providing federal tax credits to investors.
That program has helped spur roughly $1.8 billion in investments on Native lands and in Native communities since its inception in 2000, per the report.
Still, the percentage of NMTCs that have gone to Indian Country is nominal compared to what’s been allocated in non-Native communities. Since the inception of the NMTC program, the CDFI Fund has completed 19 allocation rounds and made nearly 1,600 awards totaling $76 billion in tax allocation authority, according to the CDFI Fund.
The majority of the NMTC allocations have been awarded to non-Native entities doing projects in Indian Country, rather than Native-led and Native-controlled organizations.
That needs to change, Native CDFI Network’s Upton said.
“It’s important that the leaders in those Native communities control those New Markets Tax Credits because they know the best ways to leverage them and make impacts in their tribal communities,” he said.
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