Municipality of Anchorage is awarded $13.2 million from U.S Department of Treasury for economic development
Contact: Lindsey Spinelli
ANCHORAGE- The Municipality of Anchorage (MOA) has been allocated $13.2 million by the U.S. Department of Treasury’s State Small Business Credit Initiative (SSBCI) to invest in Anchorage businesses. Anchorage is the first city in the U.S. to receive the allocation.
Many companies, particularly small businesses and start-up companies, have found it increasingly difficult to obtain loans due to the tightening of the credit markets. In 2010 Congress appropriated funds to be disbursed to states and eligible municipalities to increase the amount of capital available for small business.
Anchorage has established the 49th State Angel Fund (49SAF). The purpose of the 49SAF is to provide a new source of capital to Anchorage entrepreneurs that will spur economic development and encourage the creation of a qualified network of Angel investors. The 49SAF will make equity investments in local start-ups and small businesses that need additional capital for growth.
The 49SAF will be operated in compliance with all provisions and requirements of the Small Business Jobs Act (P.L. 111-240) and the policy guidelines for the SSBCI. Subordinate allocation agreements will incorporate the requirements and limitations identified in § 3006 (c) (4):
- targets an average investment with 500 or fewer employees;
- does not make investments in businesses with more than 750 employees;
- targets investments with an average equity position of $5,000,000 or less; and
- does not make investments that exceed $20,000,000.
The 49SAF is required to achieve a required 10:1 private capital leverage ratio. This means that Anchorage will select investments that can demonstrate that a $1 investment from 49SAF will lead to $10 of new private lending or equity investment.
Based on typical enterprise size and values in Alaska, the 49SAF will operate well below the thresholds established in the Act.
The 49SAF program policies and procedures will be administered by CFO Lucinda Mahoney and developed over the next 90 days. According to Mahoney “An intensive outreach program is planned so that we can communicate the program policies and eligibility criteria to all interested applicants. A website will be developed to communicate information about the program as soon as possible.”
The 49SAF anticipates a quarterly application process. The first deadline for applicants will be this summer.
An advisory board, consisting of local financial experts will be established to provide funding recommendations to the Mayor and CFO for final approval.
Mayor Dan Sullivan indicates “The goal of the 49 SAF is to make strategic investments to promote entrepreneurship, foster innovation, provide capital and create jobs in our community.”