Arizona Launches Microbusiness Loan Program to Facilitate Economic Development and Job Creation Throughout State
Businesses with five or fewer employees can access loans through State Partner Community Development Financial Institutions or Community Non-Profit Lending Organizations
Phoenix, AZ – Today, Governor Katie Hobbs, in partnership with the Arizona Office of Economic Opportunity (OEO), launched the Arizona Microbusiness Loan Program to foster economic development and job creation in communities throughout Arizona. The Arizona Legislature established the program last year to provide $5,000,000 in loan funding to Arizona-based microbusinesses, which are businesses with five or fewer employees. Through the program, each qualifying borrower can receive up to $50,000 in loans by applying through a network of experienced small business lending partner organizations.
“Small businesses are the backbone of Arizona’s economy,” said Governor Katie Hobbs. “My administration is focused on building an economy that works for everyone, and this program gives our smallest businesses, our microbusinesses, the opportunity to grow and thrive. By investing in these microbusinesses, we are putting money directly in Arizonans’ pockets, creating quality jobs, and strengthening local communities.”
“The CDFI and non-profit community partners selected to participate and administer the loans to microbusinesses are well recognized as champions in their communities,” said OEO Cabinet Executive Officer Carlos Contreras. “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.”
As a result of two rounds of competitive grant solicitations earlier this year, OEO selected five experienced Arizona microbusiness lending programs to partner with the State of Arizona and serve as microbusiness “lending partners.” The selected lending programs, administered by six experienced lending organizations (comprised of Community Development Financial Institutions (CDFIs) and one nonprofit community lender), will facilitate loans to qualifying microbusinesses throughout the state, including in rural and Tribal communities. In addition, each lending partner will coordinate access to required financial education and training designed to optimize the program’s impact on local communities.
There are over 85,000 microbusinesses in Arizona that employ approximately 155,000 people. Microbusinesses often face challenges in securing loan funding including limited or no credit history, insufficient collateral, limited business experience, and a lack of financial documentation. CDFIs are well-versed in screening and disbursing loans for microbusiness owners that may have no alternative source of funding to grow their business.
The Lending Partners
The following lending partners were selected to administer the microbusiness loans, serving various regions throughout the state:
Growth Partners Arizona (serving Coconino, Mohave, La Paz, and Yavapai counties) - Established in 2012, Growth Partners Arizona (GPAz) is a leading Community Development Financial Institution (CDFI) dedicated to promoting economic inclusivity across Arizona.
“Growth Partners Arizona is honored to join the Arizona Microbusiness Loan Program,” said Andre T. Whittington, executive director of Growth Partners Arizona. “This initiative brings us closer to our goal of ensuring all small businesses in Arizona can access affordable and responsible capital. Thank you to Governor Hobbs and our state legislators for making this possible.”
Native Community Capital (serving Tribal communities in Arizona, spanning the entirety of the state) - NCC provides financial products and related services to assist tribal communities in accessing capital for housing, small businesses, and community development projects. NCC's mission is to advance tribal self-determination by working as a lender and as an honest broker for unlocking capital resources necessary to build tribal economies.
"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,” said Dave Castillo, CEO of Native Community Capital. “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."
Community Investment Corporation (CIC) and Groundswell Capital (serving Cochise, Graham, Greenlee, Pima, and Santa Cruz counties) - CIC has small business loans targeting BIPOC, rural, and healthy food entrepreneurs, and Groundswell Capital has existing loan programs ranging from $2,500 to $250,000.
"Groundswell Capital is honored to participate in the inaugural cohort of the innovative microbusiness program spearheaded by the Governor's Office and the Arizona Office of Economic Opportunity,” said Dre Thompson, CEO, Groundswell Capital. “These Microbusinesses are the beating heart of Southern Arizona's small business ecosystem, with many microbusinesses fostering increased quality of life, jobs, and economic resilience in our communities. Through this enhanced access to capital, we will be able to expand our successful AVANZA Empowerment Fund as well as launch new products through Arizona's first green bank."
“Small businesses are the heartbeat of our local economies, driving innovation and creating jobs that sustain our communities,” said Community Investment Corporation (CIC) COO and Director of Lending Caroline Nelson. “By providing accessible capital and innovative products through our Alternative Loan Program, we're not just supporting individual entrepreneurs; we're investing in the economic resilience and vibrancy of our entire region. These loans will empower small business owners to turn their dreams into reality, fostering economic development and creating a ripple effect of opportunity throughout Southern Arizona."
Border Financial Resources (serving Yuma County) - Border Financial Resources is a certified non-profit CDFI serving a Hispanic Target Market in Yuma County. Founded in 2005, Border Financial Resources’ mission is to provide financing for start-ups or small businesses owned by low to moderate-income families. The vast majority of its lending is to populations and geographies with deep levels of economic distress in the rural areas of Yuma County.
"Small businesses are the foundation of our local economy, fostering innovation and generating jobs in our rural community,” said Maria Aguirre, executive director, Border Financial Resources. “By offering access to capital through this program, we support local economic development and empower entrepreneurs to grow their business. This state-wide initiative enables us to assist small businesses in ways that larger banks cannot."
Verde Valley Regional Economic Organization (VVREO) (serving the Verde Valley Region of Yavapai County) - Launched in 2012, the Verde Valley Regional Economic Organization (VVREO) provides access to economic development resources for business creation, attraction, retention, and expansion in the Verde Valley. VVREO has had a significant impact on the following key initiatives: capital creation, broadband, workforce housing, education and outreach, fiscal agent support, statewide representation and advocacy, regional and statewide collaboration, research and resources.
“VVREO has made over $1 million in microbusiness loans in recent years to businesses in the Verde Valley,” said VVREO Board Chair Tom Binnings. “We have seen no defaults and seen businesses in the early growth phase accelerate their development with a little capital and some great coaching and education from our SBDC partner. We are thrilled to grow our capital pool through the States Office of Economic Opportunity as growing our local businesses is critical to economic growth in rural areas.”
The program, which will run through 2029, creates a cycle of funding for microbusinesses, meaning that once loans are paid back, those funds will be invested back into the program and made available for other businesses. With community lending partners announced, their first action will be to invite microbusiness owners to apply for these loans. Microbusinesses will be able to apply for these loans directly through their closest community lending partner serving regions across the entire state.
Governor Hobbs announced the launch of the Microbusiness Loan Program in her address to the Rural Policy Forum in Clarkdale today. Following her address, she attended a “Microbusiness Roundtable Listening Session” to hear from program lending partners, community non-profit leaders, and microbusiness owners who could benefit directly from these loans.
“To hear the excitement from these microbusiness owners was very encouraging for the success of the Microbusiness Loan Program,” said Contreras. “And not just the funding - these business owners expressed their eagerness to participate in the financial education and training component of the program as well, to ensure the successful growth and long-term stability of their businesses.”
For more information about this program, please visit OEO.AZ.GOV.
For media inquiries, please contact: Gina Flores, Office of Economic Opportunity [email protected]
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