Expanding access to credit ensures a business-friendly climate

In Arkansas, we know that success isn’t just about having a good idea; it takes hard work and also the right tools to see it through. As someone who has spent over 30 years working in economic development, I’ve seen firsthand how access to credit has changed the game for businesses large and small, in cities and in rural areas, helping entrepreneurs turn their good ideas – their dreams – into reality.

Over time, we’ve made incredible progress in opening doors for those who were once left on the sidelines of our economy. In the past, a small farmer or a shopkeeper often had to rely on a single local lender or, worse, predatory “handshake” deals that lacked transparency.

Today, that has changed. A small business owner in Little Rock can manage cash flow with financial tools ranging from a line of credit to a credit card, while a producer in the Delta can cover a sudden equipment repair during harvest. Access to credit isn’t just a matter of convenience — it’s a vital lifeline of liquidity that keeps our Main Streets bustling and our rural communities humming.

Smart policy choices, new financial products, including credit cards, and the expansion of community banks are among the factors that have contributed to this positive trend. The late 1990s in particular saw a rapid expansion of credit to lower income groups, including through beginner credit cards that allowed individuals and businesses to build their credit. This included numerous small businesses, many of which rely on credit cards for start up expenses. Today, more than half of businesses use credit cards on a regular basis and 42% of small businesses use credit cards as their primary funding vehicle.

While we’ve made important progress in many areas, there is still important work to be done to protect and expand access to credit even further.

Rural communities have historically faced significant barriers to accessing credit. Residents in these areas tend to have lower incomes and, therefore, poverty rates are higher. This often translates to fewer assets and lower credit scores, making it harder for folks to obtain credit.

On top of that, “banking deserts” are more common in rural areas. Folks in rural areas tend to rely more heavily on physical bank branches and the relationships they offer. By maintaining a responsible approach to financial regulation and public policy, we can find solutions that meet the needs of communities that continue to be underserved.

I, like most Arkansans, want policymakers to continue to focus on expanding opportunity. Without these important tools to access credit, consumers would be forced to turn toward less-regulated, more expensive, and often predatory alternatives that don’t play by the same rules.

We’ve worked too hard to build a modern, inclusive economy in Arkansas, and any policy that threatens access to credit is bad policy.

I urge our lawmakers to protect the financial tools our families and businesses depend on and continue to work on solutions so that every American can obtain access to credit.

Editor’s note: Jay Chesshir is the president & CEO of the Little Rock Regional Chamber of Commerce. The opinions expressed are those of the author.