At Growth Partners Arizona, we understand that small businesses are the backbone of our communities. They drive local economies, create jobs, and infuse our neighborhoods with unique products and services. Yet, despite their vital role, too many entrepreneurs—especially those in underserved areas—struggle to access the capital they need to grow and succeed. This struggle is not just a financial one, but a personal and emotional one for these entrepreneurs.
As we celebrate Small Business Week, we are proud to highlight our commitment to closing the lending gap and supporting the resilient entrepreneurs who shape Arizona’s future.
The Lending Gap: A Persistent Challenge in Arizona
Despite the importance of small businesses, financial resources are not distributed equitably across Arizona. The state has 908 CDFI-Certified Investment Areas (IA) across its 15 counties. The Community Development Financial Institutions (CDFI) Fund identified these IAs as areas experiencing significant economic distress, including high poverty rates, low median family income, or high unemployment. They are communities that most need financial support to stimulate local growth.
Breaking Down the Numbers
The majority of Arizona’s IA tracts are located in its two largest counties:
- Maricopa County (home to Phoenix) has 429 IA tracts, where 43% of residents live.
- Pima County (home to Tucson) has 156 IA tracts, where nearly 60% of residents live.
Despite this, there has been a disproportionately low number of small business loans in these distressed census tracts. In 2023, only 20% of small business loans under $100,000 and 30% between $100,000 and $250,000 in Maricopa County went to IA-qualified census tracts, despite the significant IA population. Similarly, in Pima County, just 29% of small and 32% of larger loans were made in IA areas, even though most of the population resides there.
The disparity is even more pronounced in Arizona’s rural counties. These 13 counties, classified as having fewer than 500,000 residents, often receive even less financial support. While other statewide CDFIs focus primarily on Maricopa and Pima counties, Growth Partners Arizona fills the rural gap by offering crucial support to businesses in these less populated areas.
Growth Partners Arizona: Championing Inclusive Lending
Over the past three years, 75% of our loan capital has gone to businesses or nonprofits in IA-qualified tracts. Our approach focuses on character-based lending, a unique method that looks beyond traditional credit scores to consider the integrity and potential of the entrepreneur. This means we assess the borrower’s character and reputation, their business plan, and their commitment to the community, allowing us to reach communities that mainstream lenders often overlook.
Our work wouldn’t be possible without collaboration. We partner with mission-aligned organizations such as CIC Tucson, Local First Arizona, Moonshot AZ, and Arizona’s Office of Economic Opportunity to develop innovative lending products that bridge the gap for underserved entrepreneurs. This collaborative approach is a powerful tool in our mission to empower Arizona’s small businesses.
Our Character-Based Loan Programs: Building a More Equitable Economy
We offer a range of character-based loan products designed specifically to meet the needs of marginalized communities. These programs prioritize accessibility and fairness, providing flexible financing regardless of credit history or traditional financial barriers.
One of our most impactful programs is the Kiva Loan Program, which provides small businesses with 0% interest no-fee microloans. This program is ideal for entrepreneurs who may not qualify for conventional loans. A great example of its impact is Di Luna Candles, which used a Kiva Loan to open a second brick-and-mortar location, expanding its reach and sharing handcrafted products with more neighborhoods. These success stories are a testament to the potential of character-based loans to transform businesses and communities.
The BIPOC Loan Fund supports Black, Indigenous, and People of Color entrepreneurs by offering flexible, character-based lending to level the financial playing field. A success story from this program is that it is a family-owned business that used the funding to strengthen its marketing efforts and secure trademarks, ensuring its brand’s protection and growth.
The Green Loan Fund focuses on financing sustainable business practices, helping entrepreneurs build a greener future. One of our proudest achievements is supporting Social Spin, a community-driven laundry service that expanded its electric vehicle fleet to reduce its carbon footprint and enhance community services.
The Spark Loan Fund is specifically tailored for small businesses in Avondale. It provides character-based loans at the WSJ Prime rate, aimed at fostering early-stage ventures. A local spa used a Spark Loan to purchase new equipment, enhancing client services and boosting business growth.
We also partner with the Arizona Microbusiness Loan Fund Program, funded by the State of Arizona and designed to support microenterprises with five or fewer employees. Unlike our other character-based loans, this program offers low-cost loans and includes a 25% guarantee, which means the State of Arizona shares the risk with GPAz. This structure makes it easier for microenterprises to secure the necessary funding. A notable success is a family-owned construction company in Mohave County that used this loan for gap financing to purchase the building they had been leasing for years, securing their business location and stabilizing their future.
Empowering Dreams, Strengthening Communities
Our commitment to Arizona’s small businesses goes beyond just financial support. We are building long-term partnerships, offering financial education, and providing capacity-building resources to ensure our borrowers access capital and thrive.
These loan programs are more than just financial transactions—they are investments in opportunity and community growth. By working with local partners and focusing on character-based lending, we ensure that Arizona’s entrepreneurs, regardless of background, have the opportunity to succeed.
This Small Business Week celebrates the resilient entrepreneurs who drive our state forward. Your innovation, dedication, and hard work are what make Arizona stronger. Growth Partners Arizona stands beside you, ready to support your journey.
Let’s continue to break barriers and build opportunities for all. Because when small businesses win, our communities thrive.
Join Us in Empowering Arizona Entrepreneurs!
Visit our website to learn more about our lending programs and how you can help uplift local businesses. Together, we can build a more inclusive and prosperous Arizona.
