Arizona Launches New Programs to Support Small Business Growth
For many small business owners, accessing essential capital remains a formidable challenge. In response, Arizona is unveiling new initiatives to bolster the viability and expansion of small enterprises, particularly those led by individuals from underserved communities. Governor Hobbs, in collaboration with the Arizona Commerce Authority (ACA), has announced a partnership with community financial institutions and mentors to introduce a comprehensive suite of support programs.
A 2023 study by The Kauffman Foundation highlights that a significant 83% of entrepreneurs lack access to capital from conventional sources. Additionally, nearly half of small business proprietors identify obstacles such as insufficient information about available capital sources and inadequate revenue or assets to qualify for loans, according to a survey.
The ACA’s solution, the Arizona Loan Guarantee Program, offers guarantees to partner lenders for up to 50% of the principal on loans provided to qualified businesses. This initiative aids lenders in reducing risk, enabling them to extend more capital to small businesses statewide. The program currently collaborates with three Community Development Financial Institutions (CDFIs): Prestamos CDFI, Clearinghouse CDFI, and Lendistry CDFI.
Eligible borrowers include Arizona small businesses and non-profits using funds for various needs such as startup costs, working capital, equipment, inventory, construction, or renovation.
Furthermore, the ACA has introduced a new Technical Assistance Program. This initiative is designed to prepare small businesses in Arizona for debt or equity funding by offering financial literacy training. Depending on the business stage, assistance can be provided in groups or one-on-one.
These programs are funded by the State Small Business Credit Initiative (SSBCI) under the American Rescue Plan Act. A key focus of Arizona’s programming is on enterprises owned by socially and economically disadvantaged individuals and very small businesses that often face significant resource barriers.
What these programs are about is providing a hand-up to Arizona’s small business owners, especially those located in our most vulnerable communities historically without access to capital,
stated Governor Katie Hobbs. We’re grateful to our federal partners for making these funds available and look forward to maximizing their impact in Arizona to support as many small businesses as possible.
Sandra Watson, President and CEO of the Arizona Commerce Authority, emphasized the importance of these initiatives: The success of Arizona’s economy is closely linked to the success of our small businesses, which is why supporting entrepreneurs and small business owners serves as one of the ACA’s primary missions. We thank Governor Hobbs and all of our community partners helping us launch these important new tools to support small businesses statewide.
Jose Martinez, President of Prestamos CDFI, praised the initiative: Access to capital has long been a challenge for small business owners, especially those in underserved communities. We applaud the leadership of Governor Hobbs and the ACA to launch these innovative programs that not only provide financial support, but also empower entrepreneurs with the tools and knowledge they need to thrive. This initiative embodies our commitment to fostering economic growth and inclusivity across Arizona.
Small businesses in Arizona that have been in operation for at least two years and are ready to apply for a loan can utilize the Funding Readiness Checklist and reach out to one of the partnering loan institutions for inquiries. Those with less than two years of operation can access support through the ACA’s resources and partners, including SCORE Greater Phoenix for mentorship and Prestamos’ Women’s Business Center for training and business assistance.
Upcoming Event
The ACA is organizing a Small Business Boot Camp webinar on May 14, focusing on understanding SSBCI for Arizona businesses. For more information and to register, click HERE.
Media Contact
Alyssa Tufts, Arizona Commerce Authority, [email protected]
About the Arizona Commerce Authority
The Arizona Commerce Authority (ACA) serves as the state’s principal economic development organization with a core mission to enhance Arizona’s economy. The ACA employs a three-pronged approach: attract, expand, create – drawing out-of-state companies to Arizona, assisting existing businesses with expansion, and fostering new business creation in targeted industries. For more information, visit azcommerce.com and follow them on Twitter @azcommerce.
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