Tucson creates loan program to help underrepresented businesses

Avanza Empowerment fund will provide small businesses with support and flexable capital.
Avanza Empowerment fund will provide small businesses with support and capital.
Published: Apr. 3, 2023 at 8:42 AM MST
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TUCSON, Ariz. (13 News) - This month the Tucson Industrial Development Authority in partnership with the city of Tucson Department of Economic Initiatives will start the Avanza Empowerment Fund, a loan program aimed at helping mainly women-, minority- and veteran-owned businesses unique to Tucson.

During the pandemic, one thing they learned was the importance of small businesses. When one closed its doors, it was felt by the entire community. Therefore, these groups wanted to continue supporting these businesses post-pandemic with support and flexible capital.

“The small businesses that are unique to Tucson are also important in terms of their legacy to Tucson. Many years of history here and we want to see those businesses sustained because they are the essence of the community and what makes Tucson unique,” Barbra Coffee, director of economic initiatives for the city of Tucson.

The city began helping small businesses during the pandemic when many struggled to keep their doors open. Now post-pandemic, the city wants to ensure these businesses are prepared for the future.

“What we can do is prepare them to be in a better situation, to plan better, to be more financially sound, to have access to capital, so they can make it through the tough times,” Coffee said.

The Tucson IDA decided to help the city further by focusing on growing underrepresented small businesses.

“We wanted to make sure that we were as inclusive as possible. So we are, that seemed like a really natural fit,” said Dre Thompson, CEO of Tucson Industrial Development Authority. “They’ve really been working close, boots on the ground, understanding specifically the needs for capital for these businesses, through our work through research, and also through the stories that had been coming out of the work from the city of Tucson.”

This program will combine business and loan support. Both groups recognized that a number of businesses do not have enough history to qualify for a traditional bank loan.

“With the Avanti Empowerment Fund, we work with the small business to say, ‘What are the rates that work for you? Tell us about your business. Are the summer months challenging? Let’s lower that, so that that doesn’t become a barrier for you.’ We have low interest rates. We don’t require collateral or credit score,” Thompson said. “Then we wrap around the whole business with this technical support. Each business gets a champion to help them with their strategy, executive coaching, all the services wrapped into capital and technical assistance for the businesses.”

The applications will be reviewed by a group made up of the city, Tucson IDA and small businesses that are helping to make the community stronger.

Business owners can expect the process to take under two months from the time they apply to when they get funding.

“Our fund is really for minority women and veteran-owned businesses. You have to have been in business for 12 months. And our loan sizes are from $5,000 to $250,000,” Thompson said.

Businesses that do not qualify the first time they apply will continue to receive support until they can receive loan assistance.

“We’d like to say it’s not a no, it’s not yet. So if you’re not quite fit for the fund, we can help you with some of your getting your paperwork in line. As you know, it can be a challenge to have everything, all your ducks lined up in a row when you need your capital,” Thompson said.

Thompson said they are also in the process of building the Avanza Empowerment Center downtown. This will be a one-stop shop for business support and loans. It is expected to open in 2025.