(The Center Square) – Some small businesses in Arizona can now request small loans of $50,000 and under, the governor’s office announced last week.
Dubbed the “Arizona Microbusiness Loan Program,” it uses $5 million in funding allocated from the legislature last year to distribute loans using partners financial institutions at the local level. A microbusiness in Arizona is defined as those with five or fewer employees, according to a news release.
“The [Community Development Financial Institution] and non-profit community partners selected to participate and administer the loans to microbusinesses are well recognized as champions in their communities,” OEO Cabinet Executive Officer Carlos Contreras said in a statement.
“The work they do each and every day to lift small businesses, both through financial solutions as well as business education and training, enhances the opportunity for positive outcomes from these loans, while significantly boosting the economic impact of these microbusinesses to the communities where they operate. This program will supercharge their efforts and put more money into microbusinesses across the state that may not have the ability to secure conventional loans from traditional financial institutions,” he continued.
According to the governor’s office, there are roughly 85,000 businesses in the state with 155,000 employees in total. The loans are seen as a way to encourage business growth in the state, particularly in regions or among groups that could see a high benefit from increased economic development, such as in rural communities.
The partners include Growth Partners Arizona, Native Community Capital Community Investment Corporation (CIC), Groundswell Capital, Border Financial Resources, Verde Valley Regional Economic Organization. Many of them have a regional focus or prioritize assisting groups including Hispanic and tribal business owners.
“A recent study by our organization commission found that tribal lands received less than one cent for each dollar loaned to small businesses, effectively starving Native American communities of economic opportunity,” Dave Castillo, CEO of Native Community Capital said in a statement. “The Governor’s Microbusiness Loan Program partners with lenders that go where banks fear to tread and reflects a commitment to support Native economies and tribal citizens and to a more resilient economy that benefits all citizens.”
According to the Arizona Commerce Authority, small businesses, which can typically be much larger than just “microbusinesses” make up 99.5% of the state’s businesses, which comes out to roughly 650,000 of them.