The FORGE Community Loan Fund announced Wednesday (Oct. 2) that it awarded $2.8 million in microloans to underserved small businesses in Arkansas in fiscal 2018, a robust 158% increase from the previous year.
FORGE Executive Director C.J. Sentell told Talk Business & Politics that the year-over-year spike in microloans was largely due to the Huntsville, Ark.-based community development nonprofit group’s strategic plan over the past year to expand outside of Northwest Arkansas. That expansion included hiring additional personnel in central, east and southern Arkansas in fiscal 2019. Plans are also in the works to hire additional staff in northeast Arkansas soon, he said.
“The year-over-year was just due to a concerted effort to reach more parts of the state. A couple of years ago the FORGE board decide to go statewide. For the first 25 years of our existence, we were just in Northwest Arkansas,” said Sentell. “In the past year, we expanded the staff dramatically. We saw such an increase in lending due to those people just being on the ground.”
During the fiscal year that ended Sept. 30, FORGE made 87 loans to underserved entrepreneurs, including 36 loans (41%) to minority entrepreneurs, 34 loans (39%) to women, and 8 loans (9%) to veterans. Sentell said the average loan demand this year was about $32,000, although the state’s oldest revolving community lender abides by the federal guidelines for making microloans between $500 and $200,000.
“Loans were for working capital, equipment, business acquisition, debt refinance, and purchasing or developing real estate, among other small business purposes. “These loans are critical to building a robust entrepreneurial ecosystem in Arkansas,” Sentell said.
Since being founded in 1988, FORGE has promoted community development and economic opportunity in Northwest Arkansas by linking investors with borrowers, urban and rural communities, consumers with producers, and low-income groups with basic affordable credit. Among the top microlenders in the country, FORGE is a U.S. Small Business Administration (SBA) Intermediary Microlender and is certified by the U.S. Department of Treasury as a Community Development Financial Institution (CDFI).
Sentell said FORGE’s mission is to provide access to affordable capital and business development services to small businesses that are financially viable, but otherwise have difficulty obtaining capital from banks and conventional lenders. The nonprofit group has also served entrepreneurs throughout the region with technical assistance and microlending, working primarily with low-income individuals and services tailored to underserved communities.
Key foundation partners include the Winthrop Rockefeller Foundation, the Arkansas Community Foundation, and the Sachs Family Foundation. Key state partners include the Arkansas Department of Finance and Administration Capital Access Program, the Minority and Women’s Business Development Division at the Arkansas Economic Development Commission, and the Arkansas Small Business Technology and Development Centers. Other partners include Remix Ideas, the Arkansas Women’s Business Center, Consumer Credit Counseling of Arkansas, the Senior Corps of Retired Executives, BankOn+ Arkansas, the U.S. Department of Agriculture, and the U.S. Small Business Administration.
According to Benito Lubazibwa, CEO or Little Rock-based ReMix Ideas Inc., access to capital is a major barrier for small businesses, especially minority-run early stage companies and startups.
“FORGE intentionally and strategically addresses this barrier for underserved entrepreneurs and $2.8 million in microloans will increase the potential for these businesses to scale, create employment and contribute to the economic development in their communities,” said Lubazibwa, whose firm recently partnered with FORGE to sponsor the inaugural Startup Business Academy at Philander Smith College. That 12-week program guided mostly women and minority entrepreneurs through the early stages of business development.
To learn more about FORGE, click here.