Summary#
The SPARK Act adds two new programs to the Small Business Act. The first is the Spark Program, run by the Small Business Administration (SBA), to fund local incubators, accelerators, and similar projects that serve startups and small businesses in underserved or distressed areas. The second is the Spark Financing Program, which gives grants or low-cost loans to covered small businesses through eligible local organizations.
The bill defines who can get money (eligible entities such as incubators, accelerators, community development financial institutions, minority depository institutions, colleges, and certain lenders). Projects must provide mentorship, one-to-one counseling, a structured mentorship program, and make services free or low cost. Projects must focus on underserved groups (for example women, veterans, people with disabilities, formerly incarcerated individuals, and businesses in rural or low-income areas). The SBA must set selection criteria, run annual program and financial examinations, provide training and technical assistance, publish program information, and report to Congress each year.
Key finance details in the bill: eligible entities must receive at least $500,000 per year under the Spark Program; covered entities may receive up to $1,000,000 per year if they have an SBA cooperative agreement (or up to $500,000 per year if not). Grants to individual small businesses are capped at $20,000 each. The bill authorizes "such sums as may be necessary" to carry out the programs and limits SBA administrative use to no more than 10 percent of funds for each program.
What it means for you#
- If you run or start a small business in a low-income, rural, or otherwise underserved area, the bill aims to increase local support through incubators and accelerators that offer mentoring and help with investment readiness.
- Local organizations that run incubators or accelerators may be able to get multi-year cooperative agreements with the SBA and separate financing to pass as grants or low-cost loans to small businesses.
- Participating businesses could access mentorship, counseling, and small grants (up to $20,000) or loans with lower interest rates or smaller equity requirements than typical market deals.
- Programs must keep participant information private except for limited audit or legal reasons.
Expenses#
- The bill does not set a total dollar amount for the programs. It authorizes appropriations of "such sums as may be necessary." No specific total appropriation amount is provided in the text.
- Specified minimums and limits in the bill include: at least $500,000 per year to each eligible entity under the Spark Program; up to $1,000,000 per year to covered entities with an SBA cooperative agreement, or up to $500,000 per year to covered entities without such an agreement; individual grants to covered small businesses capped at $20,000; and up to 10 percent of funds may be used by the SBA for administrative expenses.
Proponents' View#
- Supporters say these programs will spur economic growth in underserved communities by creating jobs and improving access to capital.
- The bill’s authors emphasize building local, place-based entrepreneurial ecosystems that give startups mentorship, training, and connections to lenders and investors.
- It aims to close gaps in revenue, employment, and financing for minority-owned, women-owned, rural, and other underserved small businesses by growing existing incubators and accelerators and by involving community lenders.
Opponents' View#
No publicly available information.