Small businesses can begin applying now for up to $7 million in zero-interest loans under an initiative the governor started to help companies navigate the challenging economy.
Arkansas bankers and small businesses, meanwhile, are beginning to evaluate the $2 trillion federal stimulus package that Congress approved last week. The package includes $377 billion in federally guaranteed loans to small businesses.
The Arkansas Commerce Department's quick action program will provide bridge loans to businesses grappling with economic distress caused by the coronavirus pandemic.
The program will be administered by the Arkansas Economic Development Commission in partnership with Arkansas banks. AEDC is a part of the state Commerce Department.
[CORONAVIRUS: Click here for our complete coverage » arkansasonline.com/coronavirus]
"In such an unprecedented time in our state's and nation's history, it's critical for AEDC to partner with our lenders to address our current economic crisis," said Secretary of Commerce Mike Preston. "Our businesses need relief, and we are dedicated in helping see them through this difficult time."
Two weeks ago, Gov. Asa Hutchinson pledged $4 million to begin the initiative and Attorney General Leslie Rutledge contributed another $3 million.
"The highest priority for Arkansas banks is taking care of their customers, and they are committed to responding to the needs of their communities," said Rob Robinson, chairman of the Arkansas Bankers Association. "The new AEDC quick action loan guaranty program will be another tool that Arkansas banks can use to help businesses and our local economy."
The $4 million from the governor will give priority to small- and medium-sized companies that are in the supply chain of essential goods and services. The allocation from the attorney general will support small businesses in any sector.
Individual loans are capped at $250,000, and the economic development commission will guarantee up to 80% of the principal balance of a loan issued by a participating lender. The money may be used for working capital, inventory, payroll and other areas that support business operations.
"The AEDC's new quick action loan program will provide Arkansas' community banks additional flexibility in meeting the needs of their customers and their community," said Chris Padgett, executive director of the Arkansas Community Bankers Association. "We certainly appreciate the leadership of the Commerce Department and the AEDC for making this critical, financial support available to our local businesses and, as always, community banks stand ready to assist."
Companies interested in participating are advised to contact their local banks. Information also is available by calling 1-800-ARKANSAS or by emailing [email protected].
The governor also has pledged to use $12 million in federal Community Development Block Grant funding to provide loans to small businesses during the pandemic. Federal approval is required to redirect those funds, and state officials said Monday they are working to get that support.
On Monday afternoon, U.S. Rep. French Hill of Little Rock led an online meeting to discuss the federal stimulus package with about 300 bankers and business owners in Central Arkansas. The congressman was joined by Edward Haddock, head of the Small Business Administration's Arkansas office, and Jay Chesshir, president and CEO of the Little Rock Regional Chamber of Commerce.
Hill said specific guidelines for the federal aid are expected to be in place this week.
Business on 03/31/2020