Skip Navigation LinksADECA > Divisions > Community and Economic Development > Community Development Programs > State Small Business Credit Initiative
State Small Business Credit Initiative

​On September 27, 2010, the Small Business Jobs Act was signed into law to help increase credit availability for small businesses. The Act created the State Small Business Credit Initiative (SSBCI) and the state of Alabama was approved by the Treasury for $31,301,498.

The Community and Economic Development (CED) Division of ADECA is responsible for implementing and managing the SSBCI program in Alabama. The State Banking Department will advise and assist the ADECA staff in the program implementation.


Overnight Address:​ ​Standard Address:
Attn: Community Development Programs
401 Adams Avenue, Suite 500
Montgomery, AL 36104
Attn: Community Development Programs
P.O. Box 5690
Montgomery, AL 36103-5690




For more details on the program, click the following:​
Eligible Programs
Lender Experience and Capacity​
Loan Purpose Requirements and Prohibitions​


Eligible Program

Loan Guaranty

The state Loan Guaranty program is designed to enable lenders to make term loans or provide lines of credit to new or existing small businesses in this difficult credit environment. The state guarantee will be for 50 percent of the principal value of the loan, and the state will share equally with the lender in losses resulting from loan defaults. The lender will pay a loan guarantee fee of one percent on the guaranteed portion of the loan.


Lender Experience and Capacity

The financial institutions participating in the Alabama’s SSBCI program shall possess sufficient commercial lending experience, financial and managerial capacity, and operational skills to meet the program objectives.


Loan Purpose Requirements and Prohibitions

The loan proceeds must be used for a “business purpose.” A business purpose includes, but is not limited to, start up costs, working capital, business procurement, franchise fees, equipment, inventory, as well as the purchase, construction renovation or tenant improvements of an eligible place of business that is not for passive real estate investment purposes. The definition of business purpose excludes activities that relate to acquiring or holding passive investments such as commercial real estate ownership, the purchase of securities; and lobbying activities.

The loan proceeds will not be used to: repay delinquent federal or state income taxes unless the borrower has a payment plan in place with the relevant taxing authority; repay taxes held in trust or escrow, e.g. payroll or sales taxes; reimburse funds owed to any owner, including any equity injection or injection of capital for the business’ continuance; or purchase any portion of the ownership interest of any owner of the business.

The borrower cannot be an executive officer, director, or principal shareholder of the financial institution lender; a member of the immediate family of an executive officer, director, or principal shareholder of the financial institution lenders; a related interest of an such executive officer, director, principal shareholder, or member of the immediate family.

Additionally, the borrower cannot be a business engaged in speculative activities; a business that earns more than half of its annual net revenue from lending activities; unless the business is a non-bank or non-bank holding company certified as a Community Development Financial Institution; a business engaged in pyramid sales; a business engaged in illegal activities; a business engaged in gambling enterprises.



Phone: (334) 353-5353

Copyright © 2020 ADECA - All Rights Reserved