Expand Your Lending Capacity With Confidence.

TOEFUATA'I AFAMASAGA: This is a brief overview of the SSBCI credit support programs administered by DCN and how they work with your existing lending process. The goal is to introduce when these programs may be useful and how lenders typically engage with DCN.

TA: DCN works directly with lending institutions to support small businesses through the State Small Business Credit Initiative. We don’t replace your underwriting, and we don’t work directly with borrowers. Instead, we partner with lenders when a loan is fundamentally strong but doesn’t quite meet policy on its own. Our role is to help lenders say ‘yes’ to more strong businesses that may need just a little additional support to meet your credit standards.

TA: SSBCI is a U.S. Treasury initiative designed to expand access to capital for small and disadvantaged businesses by working alongside private-sector lenders. Rather than guaranteeing loans, the program provides credit support that strengthens loan structures. Because SSBCI funds operate through revolving programs, the capital can be reused over time to support ongoing small business lending.

TA: DCN administers two SSBCI credit support programs: Loan Participation and Collateral Support. Both programs are designed for near-bankable deals — loans with solid fundamentals that may fall slightly outside policy due to collateral gaps, borrower cash contribution challenges, or risk concentration. The goal is to strengthen good loans while preserving your underwriting approach.

TA: With Loan Participation, DCN purchases a subordinated portion of the loan — up to fifty percent. Lenders retain the senior position, set the loan terms, and service the loan. In the event of default, lender principal is repaid before DCN’s. Because DCN is providing part of the capital, this program can also help address situations where a borrower has limited cash available for a required contribution. Loan participations can support loans from ten thousand dollars up to twenty million, with terms up to ten years, and a closing fee of one percent or less.

TA: The Collateral Support Program provides pledged cash to help strengthen a lender’s collateral position — again, up to fifty percent of the loan amount. This program is most helpful when repayment ability is strong but collateral coverage falls short. Collateral support is available for up to five years and includes a flat two percent fee. Because funds are encumbered at a lower interest rate, it’s typically used for specific collateral gaps rather than broader financing needs.

TA: Eligibility is based on ownership or location within the participating jurisdiction, as well as economic impact. Most supported businesses have five hundred or fewer employees, though the program allows for up to seven hundred fifty. Eligible uses include working capital, equipment, construction, inventory, and real estate. Certain uses — such as passive real estate or transactions already supported by another federal program — are generally not eligible. DCN encourages lenders to reach out early to discuss eligibility questions.

TA: From a lender perspective, the process is designed to fit within existing workflows. A lender identifies a strong deal that may need additional support and contacts DCN for an initial discussion. If the project is a good fit, underwriting proceeds as usual and materials are submitted for review. DCN works alongside the lender through approval and closing, while loan servicing remains with the lender. Many lenders also find that these loans may support CRA objectives.

TA: SSBCI is most effective when a borrower is fundamentally sound but slightly outside policy. This might include a collateral shortfall, limited borrower cash contribution, a newer business, or a growing company whose expansion temporarily puts pressure on ratios. If a deal feels close — but not quite there — SSBCI may help bridge the gap.

TA: Lenders with potential opportunities or questions are encouraged to connect with DCN early. The team works directly with lenders to talk through scenarios, review potential structures, and determine whether a program may be a good fit.

TA: DCN values long-term partnerships with lenders and a shared commitment to responsible small business lending. We look forward to working together to support strong businesses and the communities you serve.