The Federal Home Loan Bank of Atlanta is scheduled to announce today a $250,000 grant to the College Park-based New Markets Growth Fund, part of a new national program to provide $20 million in venture capital and technical assistance to small businesses in low-income areas.
"This is the first cash commitment for technical assistance," said Mark Grovic, fund managing director.
Including service grants, the fund has received more than $600,000 toward technical assistance.
The fund, sponsored by the Smith School of Business' Dingman Center for Entrepreneurship at the University of Maryland, College Park, is one of seven proposals chosen by the Small Business Administration to make use of federal money for investment in economically distressed areas.
The funds must raise $10 million in venture capital and $3 million in technical assistance money and services by Dec. 31 to receive federal matching grants and to begin giving away money.
The fund has raised 90 percent of its venture goal and 20 percent of its technical assistance grants, Grovic said.
The fund can close with 20 percent, or $600,000, of its technical assistance grants if it has raised all of its venture capital, Grovic said. The fund will then continue raising money until it meets its goal.
Sen. Paul S. Sarbanes, a Maryland Democrat and a co-sponsor of the New Markets Venture Capital Program that started the fund, is to attend the event.
"We hope to close the fund in the next few months, and once we close the fund we will start making investments," said Donald M. Spero, director of the Dingman Center.
The fund will be in the Smith School but is a separate, limited liability corporation and will pay rent. The $250,000 grant comes from the wholesale bank's 3-year-old, $7 million fund set aside for economic development within its district.
The bank is one of 12 privately owned home-loan banks.