Utah Small Business Credit Initiative

Strengthening Utah Small Businesses With USBCI

In 2023, the Utah Governor’s Office of Economic Opportunity built and set up a new federally funded program to reinforce small businesses throughout the state, particularly emphasizing underserved and rural communities. The new program is the Utah Small Business Credit Initiative (USBCI).

Understanding USBCI

USBCI, financed by the U.S. Department of Treasury’s State Small Business Credit Initiative Program under the 2021 American Rescue Plan Act, is a strategic response to the difficulties faced by small businesses in securing necessary capital.

With $69 million allocated to Utah from the U.S. Treasury, the initiative seeks to invigorate Utah’s entrepreneurial landscape. The Treasury and the state of Utah signed an agreement in November 2022, and USBCI program funds are available in tranches through 2030.

Utah anticipates the program will unlock about $690 million in private investments, substantially impacting the state’s small business sector.

The USBCI program will expand access to capital for Utah business owners in underserved communities, with a target of 29% of program funds allocated to businesses owned by women and culturally, economically, and geographically diverse entrepreneurs.

The program is most helpful to small businesses that cannot access traditional bank loans due to limited equity or time in operation.

USBCI’s Loan Programs

Capital Access Program (CAP)

The Capital Access Program motivates lenders to finance more projects by offering loss protection. Loan protection is particularly vital for businesses that may not meet the criteria for conventional loans. By mitigating lending risks, CAP ensures that a broader range of small businesses can access the capital they need to flourish.

If you’re a bank, credit union, or Community Development Financial Institution, you may be eligible to participate in the Utah Small Business Credit Initiative Capital Access Program (USBCI CAP).

The USBCI CAP is a flexible loan loss reserve program that helps lenders fund projects considered too risky for conventional lending. The program runs from 2023-2030.

Through the USBCI CAP, the state provides funds to a dedicated loan loss reserve account that lenders can utilize if a loan defaults. Approved loan loss reserve accounts are eligible for the USBCI CAP in an amount equal to the premiums paid by the borrower and the financial institution lender to the reserve fund. This amount is calculated on a loan-by-loan basis (Treasury Guidelines, pgs. 15-16).

The reserve account balance increases with each loan enrolled. Once the reserve account has accumulated sufficient reserves, it can provide up to 100% reimbursement to a lender for any enrolled loan that defaults.

Program highlights:

Expands access to credit for small business borrowers
Enhances Community Reinvestment Act (CRA) efforts
Maximizes private investment per dollar of public capital
Provide loans up to $5 million
Best fit for loans under $250,000

Program Partners

Eligible program partners include insured depository institutions, federally-insured credit unions, and CDFIs.

To apply to participate in the program, click the button below and select the “USBCI Capital Access Program Lender Application.” USBCI staff will review applications and notify participants upon approval.

If approved, financial institutions will be asked to execute a USBCI CAP Lender Master Agreement and adhere to the program’s terms and conditions before individual loan transactions are approved.

Program Participation

The following resources are available to USBCI CAP-enrolled lenders.

USBCI CAP Policy

Once approved, a lender can submit loan applications to the USBCI CAP. All loans must adhere to the USBCI Capital Access Program Policy (revised Dec. 13, 2022).

Borrower Eligibility Guidelines

Eligible Borrowers

Utah-based small businesses
Utah-based nonprofits

Eligible Loans

Loans may be used for a business purpose, including but not limited to start-up costs; working capital; franchise fees; and acquisition of equipment, inventory, or services used in the production, manufacturing, or delivery of a business’s goods or services. Funds may also be used to purchase, construct, renovate, or for tenant improvements of an eligible place of business that is not for passive real estate investment purposes.
Loans may not be used for passive real estate.

Borrower Application Process

The small business applies for a loan through a USBCI-enrolled Lender.
The lender reviews the loan and determines if the loan is a good fit for the USBCI CAP using the USBCI CAP Prescreen Checklist.
The lender submits a USBCI CAP Borrower Application to USBCI staff along with the required documentation:
1. Borrower:
2. Lender:
  1. Lender Sex Offender Certification
  2. Lender Use of Proceeds and Conflict of Interest Certification
If approved, the lender receives a commitment letter outlining the loan’s terms and conditions.
The lender collects all required forms and signatures and submits the USBCI CAP Demographic Application.
1. Borrower Certification Related to SEDI-Owned Businesses.
2. Privacy Act, Notice, and Demographic-Related Data Collection Form.
3. Authorization to Disclose (will be emailed with commitment letter).
The small business is funded.

Forms

Financial institution forms:

Borrower forms:

Guarantor forms:

Treasury SSBCI reference documents:

Treasury SSBCI Webpage
Treasury SSBCI Policy Guidelines (updated 10/7/2022)

Treasury SSBCI Frequently Asked Questions (Updated 12/08/2022)

Loan Participation Program (LPP)

The Loan Participation Program enhances small business owners’ access to funding. By acquiring up to 50% of a small business loan, this program not only makes funding more accessible but also brings the advantage of reduced interest rates. This initiative is crucial for small business owners looking to start or expand their businesses, especially in underserved areas.

If you’re a bank, credit union, community development financial institution, revolving loan fund, or nonprofit lender, you may be eligible to participate in the Utah Small Business Credit Initiative Loan Participation Program (USBCI LPP).

The USBCI LPP purchases up to 50% of a small business loan to expand access to credit and lower blended interest rates for small business borrowers.

The program authorizes a network of Economic Development Organizations (EDOs) to manage a loan program on behalf of the state. These organizations partner with banks and credit unions (“Primary Lenders”) on a loan-by-loan basis to expand access to capital for small businesses. The program is structured to participate directly in a lender loan at a participation rate of up to 50%.

USBCI funding deployed by EDOs receives a low-interest rate and fee set by the state. The private funding deployed by the “Primary Lender” receives a market rate set by the lender. The borrower gets a blended interest rate between the going market rate and the state's low-interest rate.

Participating EDOs will be granted 50% of the funding they deploy when the program closes in 2030. This enables this program's low blended interest rate for borrowers. It also invests in Utah's gap financing ecosystem.

Program highlights:

Enables lenders to expand access to credit for small businesses.
Provides small businesses with interest rates and fees below market rates by combining low-cost public capital with private investment.
The EDO and Primary Lender partnership enables the program to help distribute capital to underserved communities and regions.

The USBCI LPP assists Utah businesses that need capital to stabilize, pivot, or expand their businesses.

Program Partners

“Economic Development Organizations (EDOs)” include CDFIs and qualifying economic development organizations with a revolving loan fund.

Apply to participate in the program and select the “USBCI Loan Participation Program Lender Application.” USBCI staff will review all applications and notify participants upon approval.

If approved, financial institutions will be asked to execute a USBCI LPP Master Agreement and adhere to the program’s terms and conditions before individual loan transactions are approved.

“Primary lenders” include banks and credit unions. These partners are not required to apply to the program but must execute a USBCI LPP Master Agreement and adhere to the terms and conditions. To participate in the program, please get in touch with capitalaccess@utah.gov.

Program Participation

The following resources are available to USBCI LPP-enrolled lenders.

USBCI LPP Policy

Once approved, an EDO can submit loan applications to the USBCI LPP. All loans must adhere to the USBCI Loan Participation Program Policy (revised May 1, 2024).

Borrower Eligibility Guidelines

Eligible Borrowers

Utah-based small businesses
Utah-based nonprofits

Eligible Loans

Loans may be used for a business purpose, including but not limited to start-up costs; working capital; franchise fees; and acquisition of equipment, inventory, or services used in the production, manufacturing, or delivery of a business’s goods or services. Funds may also be used to purchase, construct, renovate, or for tenant improvements of an eligible place of business that is not for passive real estate investment purposes.
Loans may not be used for passive real estate.

Borrower Application Process

Loan Enrollment:

The following steps outline how lenders can process a loan through the USBCI LPP. Training, support, and networking events will be offered to support lenders as they build “CDFI/RLF” and “Primary Lender” partnerships.

The small business applies for a loan through a USBCI-enrolled Lender.
The lender reviews the loan and determines if the loan is a good fit for the USBCI LPP using the USBCI LPP Prescreen Checklist (coming soon).
The lender submits a USBCI LPP Borrower Application to USBCI staff along with the required documentation:
1. Borrower:
2. Lender:
  1. Lender Sex Offender Certification
  2. Lender Use of Proceeds and Conflict of Interest Certification
If approved, the lender receives a commitment letter outlining the loan’s terms and conditions.
The lender collects all required forms and signatures and submits the USBCI LPP Demographic Application.
1. Borrower Certification Related to SEDI-Owned Businesses.
2. Privacy Act, Notice, and Demographic-Related Data Collection Form.
3. Authorization to Disclose (will be emailed with commitment letter).
The small business is funded.

Forms

Financial institution forms:

Borrower forms:

Guarantor forms:

Treasury SSBCI reference documents:

Treasury SSBCI Webpage
Treasury SSBCI Policy Guidelines (Updated 10/07/2022)
Treasury SSBCI Frequently Asked Questions (Updated 12/08/2022)

How Utah Small Businesses Can Access USBCI Loans

USBCI contracts with Utah lenders, including:

Banks
Community development financial institutions (CDFIs)
Credit unions
Economic development organizations with revolving loan funds
Nonprofit lenders

Small businesses go to USBCI-contracted lenders to apply for and secure loans in partnership with the state.

List of enrolled lenders

Utah’s small businesses receive capital from the lender, and loan repayments help fund more access to capital for the state’s small businesses.

Program Requirements

Businesses must apply through an enrolled lender to participate in the USBCI program. Because this program works with lenders’ private capital, it reduces but does not eliminate traditional lending requirements. Program requirements include:

Business plan/intended use
Financial projections
Tax returns
Collateral
Business and personal credit scores
USBCI Certifications (listed below)

USBCI-enrolled lenders will work with borrowers individually to evaluate their eligibility for USBCI programs.

Eligible Borrowers

Utah-based small businesses and nonprofits with under 500 employees

Eligible Loans

Loans may be used for a business purpose, including but not limited to start-up costs, working capital, franchise fees, and acquisition of equipment, inventory, or services used in the production, manufacturing, or delivery of a business’s goods or services. Funds may also be used for the purchase, construction, renovation, or tenant improvements of an eligible place of business, not for passive real estate investment purposes.
Loans may not be used for passive real estate.

If you’re approved for a USBCI loan, you’ll need to complete additional forms before closing the loan:

USBCI Borrower Certification Related to Business Enterprises Owned and Controlled by Socially and Economically Disadvantaged Individuals

This federally required form helps us ensure this funding is equitably distributed. If over 29% of program funding is allocated to underserved communities, we will receive an additional $4.4 million in incentive funding.

Privacy Notice and Demographic-related Data Form

This federally required document helps us ensure this funding is equitably distributed. If over 29% of program funding is allocated to underserved communities, we will receive an additional $4.4 million in incentive funding.

Authorization to Disclose Records Form

This form lets us collect tax data to measure the cost of this program to taxpayers. Ideally, investments through USBCI will generate enough tax revenue to cover the program’s cost.

Please note these forms are not included in the initial application. Demographic information is only collected after the loan is approved. This process ensures all USBCI loan evaluations are fair and equitable.

Our Pledge to Support and Grow

USBCI is more than a financial program; it’s a pledge to nurture and support the growth of Utah’s small businesses. By improving access to capital, the initiative helps drive business expansion, realize the dreams of entrepreneurs, and fortify the state’s economic base.

For more information on how the USBCI can benefit your business, especially if you are in an underserved area, contact the team at capitalaccess@utah.gov.

USBCI News

Sep / 2024

Bank of Utah Joins USBCI

Sep / 2024

Path to Prosperity — Bringing Community and Resources Together

Aug / 2024

Banking and Regulatory Leaders Discuss Small Business Financing in Utah

View all USBCI news

USBCI Enrolled Lenders

USBCI partners with financial institutions to provide small businesses with loans. Please find a list of USBCI-enrolled lenders below. When you’ve selected a lender, let them know you’re interested in applying for a USBCI loan.

Capital Access Program

Lender/EDO	Service Area	Contact	Email
Desert Rivers Credit Union	Southeastern Utah	Lonnie Campbell	lonnie@mydrcu.com
MoFi	Statewide	Mary Milodragovich	marym@mofi.org
Suazo Business Center	Statewide	Andrea Benitez	andrea@suazocenter.org
Utah Micro Loan Fund	Statewide	Amy Phelps	aphelps@umlf.org

Loan Participation Program

Lender/EDO	Service Area	Contact	Email
Altabank	Statewide	Ryan Jones	ryan.jones@altabank.com
Bank of Utah	Statewide	Shaun Sampson	ssampson@bankofutah.com
Brighton Bank	Greater Salt Lake	Shane Giddings	sgiddings@brightonbank.com
Cache Valley Bank	Statewide	Richard Skidmore	rskidmore@cachevalleybank.com
Desert Rivers Credit Union	Southeastern Utah	Lonnie Campbell	lonnie@mydrcu.com
First Community Bank	Davis and Salt Lake Counties	Kent Vance	kvance@fcbutah.com
MoFi	Statewide	Mary Milodragovich	marym@mofi.org
Mountain West Small Business Finance	Wasatch Front	Danielle Lower	dlower@mwsbf.com
State Bank of Southern Utah	Southern Utah	Eric Swayer	esawyer@sbsu.com
Suazo Business Center	Statewide	Andrea Benitez	andrea@suazocenter.org
Utah First Federal Credit Union	Statewide	Jeff Stringham	jstringham@utahfirst.com
Utah Micro Loan Fund	Statewide	Doug Keefe	dkeefe@umlf.org

2024 Q2 Treasury Report

2024 Q1 Treasury Report

2023 Q4 Treasury Report

Contact Us

You can reach our team at capitalaccess@utah.gov. You can also see our team listed under Business Resources on our team webpage.

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