State Small Business Credit Initiative

The State Small Business Credit Initiative (SSBCI) aims to assist Illinois patrons, primarily Socially and Economically Disadvantaged Individuals (SEDI) and Very Small Businesses to spur economic growth and job creation in their local township/community, all while addressing the impact of climate change.

Background

On March 11, 2021, President Biden signed into law the American Rescue Plan Act of 2021, which provided $10 billion to fund the State Small Business Credit Initiative (SSBCI 2.0). This builds on the initial State Small Business Credit Initiative (SSBCI 1.0), through which Illinois received over $78 million for the Advantage Illinois Participation Loan Program (PLP).

Illinois will receive up to $354.6 Million to administer four programs as part of the State Small Business Credit Initiative. The expanded program offerings through SSBCI will enable Illinois to support small businesses across the state - helping them attract more capital investment and expand or launch business operations while supporting key sectors.

Furthermore, on September 15, 2021, Governor Pritzker and the Illinois General Assembly passed and signed into law the Climate and Equitable Jobs Act (CEJA), which officially designated IFA as the State Climate Bank. As the Climate Bank, IFA is dedicated to reducing carbon emissions, creating energy efficient programs, and providing equity and job creation for communities affected by the climate crisis and the clean energy transition.

To achieve these goals, IFA created Climate Bank Finance (“CBF”) to provide attractive financing in support of economic development and climate-related investment in the state. CBF’s initial effort is its State Small Business Credit Initiative (“SSBCI”)-funded Loan Participation Program. CBF is focused on accelerating the investment of private capital into clean energy projects in a manner reflective of the geographic, racial, ethnic, gender, and income-level diversity of the State.

Through CBF’s participation loan program, borrowers benefit by not only gaining access to capital, but also enjoy the advantage of lower interest rates. Lenders benefit from risk mitigation, access to new borrowers, increased loan volume, and ultimately, more capital via CBF’s low interest rates. Both lenders and borrowers can take advantage of low rates of 2% max per annum for "standard loans," and 1% max per annum for Socially and Economically Disadvantaged Individuals (“SEDI”) & Very Small Businesses (“VSBs”). IFA/CBF benefits by helping businesses create more jobs, grow efficiently, expand their footprint, and ultimately increase the economic development of the state of Illinois.

Applicable Borrower Criteria

• No more than 750 employees
• Must operate in the State of Illinois
• Be in good standing with the Illinois Secretary of State
• Clear of any back taxes
• No bankruptcies, judgements, or liens in the past 5 years

Eligible Projects

• Clean air/clean water projects and wastewater treatment
• Production/installation/servicing of wind/hydro/solar power equipment
• Production/installation/servicing of electric vehicles and EV charging stations
• Clean energy generation, alternative fuels, and new battery technologies
• Energy conservation
• Biomaterial production and sustainable agricultural practices
• Broadband expansion for rural and other underserved communities
• Other efforts providing environmental benefit/counter the impacts of climate change

Funding

Incentive amounts vary based on project type. The program offers very attractive interest rates at 1% or 2% flat per annum, with a maximum tenor of 7 years. The program minimum participation is $25K and maximum participation is up to $2MM.

FAQS

1. Do you offer grants?
   • No, we offer participation loans at highly attractive rates.
2. How can I receive a participation loan?
   • Contact your local Lender and see if they are already a participant of the Illinois Finance Authority’s Climate Bank Program. If they are not a participant and are interested in joining, please set up time with IFA, yourself, and your Lender, to discuss the program and what it takes to sign up.
3. What if I don’t have a Lender?
   • No worries! We have a list of signed-up Lenders that we can refer you to.
4. Do I need a business plan?
   • If you have an idea, but do not yet have a business plan, please contact your local Small Business Development Center to assist with business planning. Once the plan is complete take to a Lender to seek funding. If the Lender is apprehensive, speak to our program and how it was created to assist disadvantaged borrowers.
5. What projects does your program support?
   • See Eligible Projects above.
6. What uses are your loans for?
   • Eligible loans can be used to finance the following: equipment, working capital, inventory, Accounts Receivable, leasehold improvements, and real estate (must be 51% or more occupied by the business). Refinancing allowed under certain requirements.
7. What projects are prohibited?
   • Passive Real Estate, Cannabis, Adult Entertainment, Goodwill related to ownership, and the like.
8. What do I do if I don’t qualify for traditional loans?
   • The Climate Bank Finance Participation Loan Program fills in gaps that prevent businesses from obtaining financing such as low credit scores, equity and collateral shortfalls, lack of historical cash flow (i.e. start-up), and negative net worth.
9. What documentation is required to get started?
   • We will provide your Lender with our 2-page application to start, once we receive that we will send over our Master Participation Agreement for review and sign off. Once we receive that back, we can now begin doing transactions.
10. Who will I contact if I have questions about the loan?
    • Please contact your established lending partner.
11. Does the Climate Bank work with Borrowers only?
    • No, the Climate Bank works with Borrowers, Lenders, and Suppliers/Manufacturers.
12. Do you work with nonprofits?
    • Yes. Hospitals, educational institutions, and churches all qualify for the program.
13. What if my project isn’t climate-focused?
    • If your project doesn’t fall within our program scope, we will refer you to our sister organization at the Department of Commerce and Economic Opportunity via their Advantage Illinois program.

LENDERS: If you are interested in becoming a Participating Lender, please complete the REQUEST TO BECOME A LENDER form and send back to Maria Colangelo at mcolangelo@il-fa.com and Joanna Martinez-Avina at jmartinez-avina@il-fa.com. Please be sure to include a completed and signed Form W-9 and IRS 147-C Letter.