The South Arkansas Community College in El Dorado recently began exploring ideas for the expansion of small businesses and entrepreneurs in the state.

Efforts focus on providing technical, technical and financial support to entrepreneurs who want to survive and thrive, especially in the early stages of business development. School officials turned to the Hansville Forge Community Loan Fund to help create a successful program.

“South Arc is working to help people start businesses, start businesses and explore job creation opportunities,” said Dr. Bentley Wallace, president of the college.

“Opportunity to work with a group like Forge could make a difference in South Arkansas,” said Wallace. Support Forge is currently unavailable in south-central Arkansas.

Over the past five years, Forge has become a key partner for organizations looking to support and develop startups, such as South Arc. Founded in 1988 to support the agricultural sector in northwestern Arkansas, it is the oldest revolving community loan fund in Arkansas.

The South Arc initiative is a recent example of Forg’s efforts to create an ecosystem of government entrepreneurs who are often overlooked by traditional lenders to care for small business owners and provide financial support to small businesses.

“One of our goals is to create credit and support business success,” said Forbes executive director Philip Adams. “These are businesses that can’t get loans through traditional finance. They are too small to argue with banks.

“We connect unbanked and low-income borrowers with investors, and we connect urban and rural communities across the state,” he said. We want to build an impact-investing culture in Arkansas that focuses on making money, not how much investment in Arkansas.

That approach seems to be paying off, and investors are responding well.

The Forge Credit Portfolio has seen strong growth — primarily with non-profit foundations and federal agencies — and has sparked investments in small- and female-owned businesses and entrepreneurs in Arkansas.

The company has increased its portfolio by 53% over the past five years, and now has $ 5.5 million in loans to 294 borrowers, of which 60 percent has been given to small and female-owned enterprises, Adams said. A.D. In 2016, Forge had $ 3.6 million in loans for 210 businesses, 40% of which were for small and female-owned enterprises.

Credit flexibility

Like the Indirect Loan Fund, Forge’s loan to businesses is borrowed from other sources – private investors, nonprofits, and government agencies such as the US Small Business Administration. Forge makes loans from borrowers, increases interest rates to generate reimbursement, and returns the funds.

Small Business Management has a long-standing relationship with Forge and has been approved by the Federal Agency as a micro-lender with a capacity of up to $ 50,000. This fiscal year, small business management has allocated more than $ 1 million to Huntsville. Small Business Administration allows Forge to use its own smoother management requirements to approve small business loans.

“We are giving them the flexibility to lend according to the target market,” said Edward Hadok, head of small business management in Arkansas. “Forge provides addresses not only for the start-up community but also for those unwanted and unsecured individuals to start earning credit to build their entrepreneurial dreams.

The Small Business Administration has expanded its fortunes to $ 6.6 million since 2014, and has reached 261 loans in Arkansas by the end of August this year, according to the agency.

Along with microfinance, small business management provides technical support to help borrowers build business plans and consultants they need to create successful business.

“The key to this program is to help these businesses move from this product to a bank loan,” Haddock said. “We understand that they can’t just send borrowers money and send it on their way. They have to understand how to use the financial support and how to manage it.”

As a non-traditional lender with the community’s attention, Forge has more standards for pardons that are more cautious than banks or that do not guarantee bank guarantees. Forge examines credit results, debt repayments and selects collateral contributions that are lower than those required by traditional lenders.

“We don’t have a checklist to try to reconcile borrowers,” said Forge’s chief credit officer Mark Nelson. “We look at each loan individually, with the aim of contributing to the business, even if it is less than what they asked for. We want our borrowers to think of us as partners.

Expansion of funds

Credit Fund has also played a key role in helping the female-owned entrepreneur launch his first venture outside the Atlantic, said Kim Briden. Currette is selecting 10 food entrepreneurs in Northwest Arkansas to participate in a training program to refine their products and develop a marketing strategy.

Forge has offered $ 100,000 for the launch, which will begin next month and include a second group next spring. Food entrepreneurs who complete the program can turn to Forge for financial support. Cureate has a strong history around the Atlantic, supporting 11 partners with 10-25 businesses each.

“We like to partner with organizations like Forge,” said Braden. “Forge provides the package support needed to make these businesses great and successful.”

South Arkansas Forge is a prime example of how it has extended credit efforts in Arkansas. In September 2016, Forge made a loan in the area. Since last month, the company has lent $ 643,000 to small businesses in southern Arkansas.

That effort was spearheaded by Greg Modika, a small business owner in El Dorado and Forge Board.

“My role is to focus on what Forge can do as an alternative lender to support small businesses in this area,” Modika said.

He added: “The gap between white and black entrepreneurs in the country is huge in terms of supporting small businesses.” In El Dorado, this gap is wider.

Modika has been coordinating efforts to build a business incubator in SouthArk.

There is nowhere to go for business to get all the support they need.

South Arc Wallace is a firm believer in the concept and feels confident that it will work even though the final structure still needs to be scratched.

“We are not good enough to know what this looks like,” Wallace said. We know he will fall on our grounds, and we have a place for him. It all depends on going there. But if we want to build this thing, we have to make sure that we put it in the right place. Good luck. ”