The SPARK Act creates two new Small Business Administration (SBA) programs to support local incubators, accelerators, and other entrepreneur-focused projects in underserved and rural areas. One program (the Spark Program) lets the SBA enter cooperative agreements with eligible entities to run five-year projects that provide mentorship, one-on-one counseling, training, and other non-fee services. The other (the Spark Financing Program) gives covered entities grants or loans to make small grants or lower-cost loans to qualifying small businesses in areas of economic distress or owned by underserved people.
If you run or want to start a small business in a qualifying area or belong to an underserved group (for example women, veterans, people with disabilities, members of certain tribes, formerly incarcerated individuals, or businesses in rural or low- and moderate-income neighborhoods), you may get access to free or low-cost local services, mentorship, and connections to capital. Local organizations such as nonprofit incubators, community development financial institutions, minority banks, lenders, certified development companies, and certain colleges can apply to run projects and offer these services. The SBA must set up the programs within 1 year of enactment and publish selection criteria and reports about who is served.
The bill authorizes appropriations as needed but does not set a total dollar amount. It requires that each cooperative agreement provide at least $500,000 per year to an eligible entity. Under the financing program, covered entities that have an SBA cooperative agreement may get up to $1,000,000 per year, and other covered entities may receive up to $500,000 per year. A covered small business may receive no more than $20,000 in total grant funds under the financing program. The SBA may use not more than 10 percent of funds for administrative expenses. The bill calls for annual financial examinations, reporting, and regulations, including clawback rules for fraud.
The bill’s findings and stated purposes say that incubators and accelerators help startups succeed, that minority- and women-owned firms and rural firms face large gaps in access to capital, and that these programs will spur job creation, economic growth, and increased access to capital in underserved communities. Supporters would point to those findings to argue the programs build local entrepreneurship pipelines and encourage partnerships with community lenders and resource partners.
No publicly available information.