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New Tools Can Help Boost Business in Arkansas (Angela Frierson Shirey Commentary)

3 min read

During 2021, Arkansas has seen business rebound and reset. Entrepreneurs have had to flex their creative muscle during the “creative destruction” phase — a phenomenon that usually results in economic progress. As the nation recovers, small-business support will shift from averting destruction to making key investments in entrepreneurial ecosystems and small-business growth strategies.

From Arkansas Capital Corporation’s perspective as a certified development financial institution (CDFI), we have witnessed linkages among federal, state and local governments; private companies; and nonprofits that have rallied to support business development and bold entrepreneurs — notably women and minority-owned companies that have faced insurmountable barriers to entry.

These and other emergency financing options can range from short- to long-term capital and typically address one of three objectives: creative investments in for-profit operations; training and support in the fundamentals of owning and operating a commercial enterprise; and addressing racial disparities in asset ownership and generational wealth.

As a CDFI, the Treasury Department provides avenues for funding small- to large-scale projects and has increased direct lending programs and programs that target training and development of entrepreneurs, the backbone of the American economy. These tailored financial solutions can come as conventional lending financing or as New Markets Tax Credits. Allocations have been set aside for 2021, and although funding can come with restrictions, these dollars can result in an influx of capital for business expansion and development.

The Ewing Marion Kauffman Foundation, a leading source on entrepreneurial research and related grant support, reports that many new businesses are reliably effective in shoring up the economic foundation of a community or region. More than 95% of those businesses have remained small in scope while playing a key stabilizing role in their communities.

In March, the Biden Administration signed into law The American Rescue Plan Act, which includes $10 billion to fund the State Small Business Credit Initiative, administered by the U.S. Small Business Administration. Arkansas will receive an allocation whereby state agencies, partnering with CDFIs, create a tailored plan to deploy much needed funding into underserved communities.

As for private support, J.P. Morgan Chase & Co. of New York and Bank of America of Charlotte, North Carolina, have created resiliency funds and educational, on-demand courses aimed at leveling the playing field for minority-owned business. Nationwide philanthropies and foundations have pivoted programming focus to include entrepreneurship-based programs for for-profit entities, a shift that required serious thought and a revisit of guidelines that remain in compliance with regulated, charity contributions. Arkansas’ own Walton Family Foundation has led investments through grants and other forms, specifically in the Arkansas Delta, which suffers persistent poverty.

Other nonprofits such as Winrock International and The Venture Center have shown direct financial support by designing bold, innovative programs such as the Readying Business for Capital Access and Women Achieve programs, which administer grants to chambers of commerce, community-based nonprofits and entrepreneurship support organizations to reach entrepreneurs seeking guidance and intimate knowledge from veteran entrepreneurs who’ve exceled.

The sheer number of investments and programs are positive signs of a needed spark in Arkansas’ economy. In October, indicators have stabilized, which signals confidence that small-business owners can and will continue to provide the goods and services needed for people to keep enjoying the American dream.

As a nonprofit that aims to empower entrepreneurs, we at Arkansas Capital Corporation see that the Arkansas economy has myriad options to boost economic development in ways that we hope will remain robust in years to come. What might’ve been viewed as a destructive discord can now be viewed as a concordance of opportunities for businesses — it’s all a matter of perspective.

Angela Frierson Shirey is vice president of community development at Arkansas Capital Corporation of Little Rock, a private, nonprofit lending corporation founded in 1957.
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