Gov. Mike Beebe announced today that the state had received $13.1 million in federal money to loan or guarantee business loans. It can target small and minority businesses and be used for venture capital.
The dream is that it will leverage $10 in private money for every public dollar and stimulate jobs.
News release follows:
Governor Mike Beebe today announced Arkansas has been awarded $13.1 million by the United States Department of the Treasury’s State Small Business Credit Initiative (SSBCI) to help create jobs through lending and guaranteeing loans to small and minority businesses, supporting venture capital investments and making risk capital investments in technology based enterprises.
Each dollar invested in SSBCI funds is expected to leverage at least another ten dollars in private funding, resulting in an additional $130 million that will go toward Arkansas’s small businesses.
“We must create a better environment for small-business investment,” Beebe said. “The uncertainty of our national economy has made it tougher for small businesses to obtain loans and investments to create jobs. This program will help us encourage business growth in Arkansas and keep our entrepreneurial spirit strong.”
The Arkansas Development Finance Authority (ADFA) will collaborate with the Arkansas Economic Development Commission (AEDC) and the Arkansas Science and Technology Authority (ASTA) to distribute the funds through existing programs such as ADFA’s Arkansas Capital Access Program, Bond Guaranty/Loan Participation Program, Risk Capital Matching Fund, the Disadvantaged Business Enterprise/Small Business Loan Guaranty Program, the Co-investment Fund and the Seed and Angel Capital Network.
Arkansas can receive the funds in three equal installments based upon performance. At least 80 percent of the initial funds, $4.3 million, must be expended or obligated before the state can receive each successive transfer. Funds not transferred at the end of 24 months may be considered by the Treasury to be no longer allocated.
“We know this is an aggressive but attainable timetable,” said ADFA Vice President of Development Finance Gene Eagle. “The recent co-location of the Arkansas Development Finance Authority, the Arkansas Economic Development Commission, and Arkansas Science and Technology Authority, and the ensuing formation of a close working relationship, is expected to be an invaluable resource that will help target the outreach of these funds to communities throughout the state.”
The SSBCI program is a critical component of the Small Business Jobs Act signed into law by President Barack Obama in September.
SSBCI funding to Arkansas’s small businesses will start immediately with the first loan being made through ADFA’s Capital Access Program, which provides loan portfolio insurance to encourage private financial institutions to lend to creditworthy small businesses. An approved Arkansas lender, alt.Consulting, will make a $2,500 loan to Allen’s Cut and Styles of Hughes, Arkansas. alt.Consulting is a mission-driven, non-profit economic development organization providing access to loan capital of up to $50,000 for small businesses.
For more information on the SSBCI funds in Arkansas, please contact the Arkansas Development Finance Authority at 501-682-5900 or go their web site at www.arkansas.gov/adfa .