Arkansas Economic Development Commission


A True and Helpful Partner

The Business Finance Division of Arkansas Economic Development Commission facilitates competitive financing options to assist businesses with the purchase of land, buildings, technology and equipment to expand operations and provide substantial employment opportunities in Arkansas. By remaining a true and helpful partner with business, we've created one of the nation's most reliable economies. As a result, new and expanding businesses can access a wide variety of state and federal funding sources such as Amendment 82, Bond Programs, Community Development Block Grant and Equity Investment Tax Credit. AEDC also connects investors with a variety of funding partners for additional financing opportunities.

Looking to expand or locate a business in Arkansas?

Bryan Scoggins

Director, Business Finance
(501) 682-7786
(501) 682-7394
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Reducing the Cost of Doing Business

The Business Finance Division is committed to the goal of supporting eligible Arkansas businesses’ access to the most cost-efficient financing available. This access may be achieved through one or more of AEDC’s financing programs and/or those provided by our financing partners. AEDC and its partners have programs designed for a wide variety of business and to both early-stage and well-established companies.

Amendment 82 Bond Financing
Amendment 82 Bond Financing

Recognizing the importance of economic development and the tools necessary to be competitive in the global market for jobs and investment, Arkansans passed Amendment 82 to the Arkansas Constitution in 2004 authorizing ADFA to issue general obligation bonds for major economic development projects approved by the Arkansas General Assembly. These projects may include, but are not limited to: land acquisition; site preparation; road and highway improvements; rail spur construction; water service; wastewater treatment; employee training which may include equipment for such purpose; environmental mitigation; and training and research facilities and the necessary equipment therefore.

Bond Programs
Bond Guaranty Program

Under the Bond Guaranty Program, the Commission “guarantees” timely payment of principal and interest, up to $5 million principal per bond issue, to the bondholders. This guaranty gives the bonds a better rating, thereby making the bonds more attractive to investors and reducing the company’s cost to borrow money. The applicant must demonstrate to the Commission:

  • They can make the required debt-service payments.
  • The project provides substantial employment opportunities to Arkansans as a direct result of the project.

The Commission charges a one-time upfront 5% fee for guaranteeing bond issues.

The Arkansas Development Finance Authority (ADFA) also provides a bond guaranty program that enables a company to obtain competitive, fixed interest rates. The total amount ADFA can guarantee is up to $6 million per borrower; therefore, a business could obtain up to $11 million per project through combining the guaranty programs of ADFA and AEDC. ADFA has the capacity to issue bonds for a single project or for several projects on a pooled basis. The pooled or composite issue allows small businesses needing financing for fixed assets to take advantage of low interest financing and to share the costs for issuing bonds, an option which gives more financing opportunities which otherwise would not be available. 

ADFA can also provide interim financing to approved projects before bond proceeds are available.

Industrial Revenue Bonds

Industrial revenue bonds (IRBs), commonly known as “Act 9 Bonds” in Arkansas, provide eligible existing companies with competitive financing options for property, plant, and equipment expenses.

Under Arkansas Act 9 of 1960, cities and counties are authorized to issue IRBs to benefit private companies. Because Act 9 IRBs do not obligate cities or counties to make payment except from project income, the bonds must be underwritten on the financial strength of the company or guaranteed by the Arkansas Economic Development Commission and/or the Arkansas Development Finance Authority.

Interest on tax-exempt issues is normally 80 percent of prime, but this may vary depending on terms of the issue. The primary goal of this financing is to enable manufacturers to purchase land, buildings and equipment to expand their operations.

In addition to tax-exempt industrial revenue bonds, taxable industrial revenue bonds may be used for eligible existing businesses at long-term fixed rates and for manufacturing projects that exceed $20 million in capital costs or do not meet other federal guidelines relative to tax-exempt bond financing. Tourism attractions and facilities may also qualify for taxable bonds.

Businesses that use either tax-exempt or taxable industrial revenue bond financing can negotiate with the local community for property tax relief for eligible businesses in the form of Payment in Lieu of Tax Agreement (PILOT Agreement).

Tax-Exempt Bonds

Tax-exempt bonds are regulated by the IRS Code and any prospective borrower must meet basic requirements to use tax-exempt bonds to finance the project, including but not limited to:

  • The firm must be engaged in manufacturing, processing, or other activities directly supporting or related to manufacturing or processing. The project must be for expansion or acquisition of fixed assets that are needed for the manufacturing process.
  • The business’s total outstanding tax-exempt bond debt nationwide cannot exceed $40 million.
  • The total capital cost may not exceed $20 million for a six-year period.

Taxable Bonds

Taxable bonds can be issued for projects which, for whatever reason, are not eligible for tax-exempt status.  Cities, counties or ADFA may issue taxable bonds with no dollar limitation for the acquisition of land, building and equipment for manufacturing, warehousing, distribution, and corporate and management offices for industry.  The issuer may then may lease the property to a private company, which provides the opportunity, under the necessary approvals and legislative limitations, for the private industry and the local government to enter into a Payment-In-Lieu-of-Tax (PILOT) Agreement.  PILOT Agreements may also be used with tax-exempt bond issues.

  • Qualified borrowers are not limited to manufacturing companies
  • There are no capital expenditure limitations as there are with tax-exempt bonds
  • It is possible to finance the acquisition of used equipment with taxable bonds
Community Development Block Grant
Community Development Block Grant

Community Development Block Grant (CDBG) funds may be loaned to eligible businesses for fixed-asset financing on projects that create jobs for low-to-moderate income families. Examples of eligible activities for this Set-Aside Loan Program include acquisition of property, purchase of equipment, leasehold improvements and construction or expansion of buildings or physical plants. Loans are provided at competitive interest rates with flexible repayment terms. 

Under this program, job creation is required and 51% of the new jobs must benefit low-to-moderate-income persons. This means that 51% of the new positions should be made available to those persons without substantial work experience or education beyond high school.

Equity Support Programs
Equity Investment Tax Credit

The Equity Investment Incentive Program is a discretionary incentive targeted toward new, technology-based businesses paying wages in excess of 150% of the state or county average wage. If offered, this program allows an approved business to offer an income tax credit to investors who provide a cash infusion to the previously approved business through an equity purchase or a convertible debt instrument.

The income tax credit/credits issued under this program are equal to 33 1/3% of the amount invested by an investor in an eligible business.

The income tax credit earned may be used to offset 50% of the investor’s Arkansas income tax liability. Any unused credit may be carried forward for a period of nine years. The income tax credit earned may be sold upon approval by AEDC.

Research and Development Tax Credits and Incentives

Tax credits are intended to provide incentives for donations to universities, university-based research, in-house research of several kinds, and research and development in start-up, technology-based enterprises. It is important for the applicant to understand the different incentives and to select the most appropriate for the eligible research and development activity. For more information, contact Steve Stanley at .

Seed Capital Investment Program

The Seed Capital Investment Program (SCIP) can provide working capital to help support the initial capitalization or expansion of technology-based companies located in Arkansas. The program can provide working capital up to $500,000 of the company's total financing needs. Investments made by the SCIP fund are repaid through a royalty based agreement. For more information, contact Steve Stanley at .



Technology Development Program

The Technology Development Program (TDP) provides royalty financing for qualified projects possessing a well-developed, comprehensive project plan, and which utilizes the benefits of science and technology to provide economic and employment growth potential in Arkansas.

The maximum investment is $100,000 and is repaid through a royalty based agreement but the agreement will expire automatically after 10 years. For more information, contact Steve Stanley at .




Funding Partners
Arkansas Capital Corporation Group

The Arkansas Capital Corporation Group (ACCG) consists of several affiliated companies with different markets, including the Arkansas Capital Corporation (ACC), a privately owned, non-profit organization established in 1957 to serve as an alternative source of financing for businesses in Arkansas. Its main goal is to improve the economic climate in the state by providing long-term, fixed-rate loans to Arkansas businesses. Loans start at a minimum of $100,000.

As a preferred lender of the Small Business Administration, ACC makes loans to existing operations and business start-ups for everything from new construction and equipment to working capital. ACC loans may be used in combination with bank loans, municipal bond issues, or other sources of financing.

Other ACCG affiliates include the Six Bridges Capital Corporation, which administers SBA 504 loans, the Arkansas Capital Relending Corporation, which facilitates U.S. Department of Agriculture loans in communities with a population of 25,000 or less, the Heartland Renaissance Fund which structures financing for projects using the state and federal New Markets Tax Credit Programs, and the Pine State Regional Center that sponsors transactions using the federal EB-5 program.

Arkansas Development Finance Authority

The Arkansas Development Finance Authority (ADFA) Development Finance Division offers loans and bond guarantees under various programs. The Division does not offer grants under any of its programs. Applications are not restricted to any specific time period and may be made at any time on any day. Following are brief descriptions of the programs offered by ADFA in the Development Finance Division.

Economic Development Bond Guaranty Program

Provides long-term, below market fixed interest rate financing to qualifying industries through bond guarantees up to $6,000,000.

Capital Access Program

Creates a method for making slightly higher risk loans more attractive to participating lending institutions through a reserve driven fund. Loan amounts are determined by the individual lending institutions.

Arkansas Credit Reserve Program (ACR)

Encourages financial institutions to make loans to small businesses that fall just outside their conventional underwriting standards. It also works through a reserve driven fund, like the Capital Access Program, but has a minimum loan amount of $4,000 and a maximum of $500,000 for Arkansas’s businesses. The contributory percentage of the borrower remains at 1% of the loan amount.

Disadvantaged Business Enterprise/Small Business Loan Guarantee Program

Provides loan guarantee to lenders, up to 80% of the first $200,000 loan amount with maximum loan guarantee to $160,000, who in turn lends to small businesses that have government or private contracts but lack the necessary cash flow to adequately finance their working capital needs.

Arkansas Risk Capital Matching Fund

Provides matching investments in technology-based enterprises that are in the early stages of development and not yet able to attract adequate private sources of traditional financing, venture of investor-backed capital for growth and development. A portion of the fund will be used to validate early stage technology.

Arkansas Institutional Fund

Provides investment in proved, professionally managed private equity and venture capital funds that commit to include Arkansas in aggressive and visible deal prospecting. The intent is to catalyze the formation of risk capital and make it available to companies in Arkansas.

Find out more about these and other programs.