Small Business Development Center Adds $83M for Tribal Credit Initiative

Obtaining a business loan in a rural village can be problematic, says SBDC Executive Director Jon Bittner. Options for collateral and ways of building credit are limited. But the impact of building the business base in rural Alaska communities is significant. 

“This is going to drive private-sector investments into businesses and communities” that might not otherwise be able to access that kind of investment, Bittner explains. The SSBCI could help with collateral allow small lenders with limited capital to offer lower interest rates or longer returns, making loan terms more affordable for entrepreneurs. Another option is using equity funds at a one-to-one match with private capital, he says. In short, the program will provide a menu of funding-assisted options to would-be small business owners in rural Alaska that did not previously exist. And in rural Alaska, where many communities don’t have access to a local bank branch, that leg up is important. 

A new business in Anchorage, where small businesses open and shut on a weekly basis, is one thing, Bittner says, but opening a new business in rural Alaska can have broad ripple effects. For example, a new store might provide residents with the only shopping option for hundreds of miles, and providing four or five jobs would have a broad effect on the local economy. 

“Alaska’s tribes are the backbone of our rural economies. The Alaska SBDC is proud to have worked with the Alaska Federation of Natives to bring 125 Alaskan tribes together in the largest tribal consortium in the nation. This collaborative effort over the last two years will result in hundreds of millions of dollars in private sector loans and equity investments flowing into rural and Alaska Native-owned businesses, drastically changing the economic landscape of some of the most remote communities in the nation,” says Bittner.

A Broader Effort to Assist Tribes

The SSBCI, funded through the federal American Rescue Plan of 2021, provides funding assistance for small businesses nationwide. Recognizing the unique challenges faced by Indigenous businesses in securing private sector investments, the program was expanded to include funding not only for each state but also for all federally recognized tribes. This is particularly important for Alaska, where half the federally recognized tribes are located.

This program builds on the work that the Alaska SBDC, housed within UAA’s Business Enterprise Institute, is already doing through the State of Alaska’s $59 million SSBCI, which it launched last year. Since its launch, the Alaska SSBCI facilitated more than $75 million in loans to businesses across the state, making Alaska one of the top SSBCI programs in the nation. The Alaska SBDC is the only organization in the country to host both state and tribal SSBCI programs; between the two, it is projected that hundreds of millions in private-sector funding will be leveraged into Alaska’s small businesses over the next decade. 

“Through the flexibility of the consortium model, these tribes will benefit from the historic opportunity that these resources for small businesses present to Indian Country. These funds will serve some of the most rural populations in the United States, creating jobs and expanding capital access for tribes across Alaska,” says US Treasurer Chief Lynn Malerba. “We look forward to following this announcement with Treasury’s first official visit to an Alaska Native Village at Chickaloon Village.” That visit is scheduled for later this month.

The Alaska SSBCI is an important component of UAA’s continuing support for business and economic development in Alaska. Alaska Federation of Natives Executive Vice President and General Counsel Nicole Borromeo says AFN was instrumental in coordinating the involvement of the 125 federally recognized tribes in Alaska. Rena Greene, deputy director and acting executive director of the Nome Eskimo Community, backed that statement up. 

“Without the help of AFN, Nome would likely have passed on this opportunity,” Greene says. “This will provide critical resources to our community.” 

The partnership between the Alaska SBDC and Alaska Native organizations represents an important step forward for Alaska’s economic growth. UAA Vice Chancellor for Research Aaron Dotson says access to capital and fostering entrepreneurship will empower tribes to build a more prosperous and sustainable future for generations to come.

“We are proud to partner with the tribal community and look forward to assisting in deploying funds to build thriving community businesses and build a more prosperous future for all Alaskans for generations to come,” Dotson says.