LITTLE ROCK — Arkansas is eligible for up to $13.1 million in federal funds to help generate jobs through lending and guaranteeing loans to small and minority businesses, Gov. Mike Beebe announced Monday.
Each $1 invested in the U.S. Department of the Treasury’s State Small Business Credit Initiative is expected to leverage at least $10 in private funding, resulting in an additional $130 million that will go to small businesses across the state, the governor said.
“We’re trying to create some capital collaboration with our banks for loans, and in some instances possibly more investment in small business enterprises, to create a better atmosphere for our small businesses to be able to have some capital to … help stimulate the economy,” Beebe said during a news conference at the state Capitol.
The program is part of the Small Business Jobs Act signed into law by President Obama in September. The Arkansas Development Finance Authority will work with the Arkansas Economic Development Commission and the Arkansas Science and Technology Authority to distribute the money through existing programs.
Those include Capital Access Program, Arkansas Risk Capital Matching Fund, Bond Guaranty Program, Disadvantaged Business/Small Business Guarantee Program, ADFA co-investment Fund and Seed and Angel Capital Network.
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Gene Eagle, ADFA’s vice president of development finance, said the state has already received $4.3 million and is to receive the rest in two more equal installments if 80 percent of the original amount is spent or obligated.
Funds not spent or obligated at the end of two years may be considered no longer allocated by the Treasury Department. Eagle said funding has already started with the first loan of $2,500 already to Allen’s Cut and Styles of Hughes.
The loan was made through ADFA’s Capitol Access Program. Southern Hardware in Helena-West Helena has received a $230,000 loan from the Bond Guaranty Program for expansion of its facilities, and American Vegetable Soybean has received a $700,000 loan from the same program for a new facility being built in Mulberry, Eagle said.