GEDA expands SBCI program and adds venture capital component to fund local businesses

Guam Economic Development Authority (PNC file photo)

The Guam Economic Development Authority is expanding its Small Business Credit Initiative (SBCI) program and adding a venture capital component to the program.

Under the venture capital component, GEDA will shoulder 50 percent of the venture capital costs of a start-up.

“The government would be the issuer of the venture capital fund,” said GEDA administrator Melanie Mendiola.

According to Mendiola, the guidelines for the program are still being developed.

The SSBCI was created through the Small Business Jobs Act of 2010 to strengthen state programs that support the financing of small businesses.

SSBCI was created in response to the last major recession and its goal is to cover some of the losses that occur naturally in making small business loans or small business investments.

Since the funds will be coming from the federal government, Mendiola said the feds will generally say what industries they prefer, or the minimum level of job creation they would prefer.

However, what’s good about the SSBCI program is its flexibility because it allows each state or territory to design its own program.

Thus, Mendiola said they could allot venture capital to the governor’s desire to build up aquaculture, for instance, as well as other local ventures along that line.

Mendiola said the first tranche of the SSBCI funding should be released by Treasury during the third quarter of the current fiscal year.

While previously, GEDA only got $13.1 million, Mendiola said this year GEDA will get $56 million for the SSBCI program.