McKinley Alaska Growth Capital Given Small Business Lending Center License
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US Small Business Administrator Isabel Guzman on November 1 announced that the Small Business Administration (SBA) had granted three new Small Business Lending Company (SBLC) licenses to lenders focused on historically underserved markets, including McKinley Alaska Growth Capital in Anchorage.
First Time in Forty Years
The announcement marks the first time the SBLC program has been expanded in more than forty years. In addition to McKinley Alaska Growth Capital, lending companies Arkansas Capital Corporation and Funding Circle were selected. All three will support the SBA’s ongoing efforts to increase access to affordable capital for business owners in underserved markets across America and expand on the agenda of President Joe Biden and Vice President Kamala Harris to advance equity and build an inclusive economy.
“The success of America’s 33 million small businesses is a pillar of Bidenomics and foundational to the prosperity of our economy, global competitiveness, and democracy,” says Guzman. “Persistent barriers to capital, especially small dollar loans, still pose a challenge to many of the entrepreneurs who power our economy. The Biden-Harris Administration remains committed to filling capital market gaps—and the expansion of the SBA’s SBLC program after more than forty years is a monumental step forward in this crucial effort. With the addition of three new Small Business License Companies, the SBA will be able to serve even more small business owners who need capital to start, operate, and grow their businesses.”
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May 2024
In June, the SBA announced that it had opened a window for new applications for SBLC licenses. The SBA approves SBLC licenses for selected non-depository lenders to increase responsible small business lending. An SBLC license allows the lending organization to utilize government guarantees when underwriting small business loans to reduce the level of risk to the lender and cost to the borrower. As a result, SBLCs are positioned to write higher volumes of loans to small businesses than possible without a government guarantee. The SBA’s existing SBLCs outperform banks and credit unions in lending to minority-owned businesses. There are currently fourteen SBLC licenses in the marketplace, and the addition of Arkansas Capital Corporation, Alaska Growth Capital BIDCO, and Funding Circle will bring the total to seventeen, helping bring capital to new markets.
“McKinley Alaska Growth Capital is thrilled to receive a new SBLC license that will allow our community-focused SBA lending program to grow,” says Logan Birch, president and chairman of McKinley Alaska Growth Capital. “As a successful, dedicated SBA lender for more than twenty-five years in Alaska and as a certified Native Community Development Financial Institution, we’re proud of our focus and expertise in supporting businesses in rural and Indigenous communities that often lack the financial resources of urban centers. Our business model thrives on local collaboration and creative partnerships, and with this SBLC license, we will be able to offer our services to even more underserved markets outside of Alaska. Our experienced, hands-on team of SBA lenders looks forward to helping support the next generation of entrepreneurs.”
Each of the three new SBLC license holders will focus on historically underserved markets, including small businesses in Native, rural, and low-income communities. By broadening the SBA’s network of lenders, the Biden-Harris Administration is ensuring more small business borrowers can get funded, which means more opportunities for small businesses to expand, innovate, and create jobs. The expansion complements the SBA’s granting of permanent status to mission-based lenders under the Community Advantage SBLC license. Last month, the SBA announced that the portfolio of lenders licensed to make small SBA loans under the Community Advantage program had grown to 143. This announcement builds on the SBA’s modernization of its loan programs, helping promote more small business lending by streamlining credit criteria and cutting red tape for SBA lenders.
Alaska Growth Capital BIDCO, doing business as McKinley Alaska Growth Capital, is an Alaska-based Business and Industrial Development Corporation (BIDCO) and Native Community Development Financial Institution (CDFI) that has provided small business loans and technical assistance since it was founded in 1997. As a certified Native CDFI, more than 60 percent of Alaska Growth Capital’s activities serve Alaska Native, Native American, and Native Hawaiian businesses and communities. It is the largest non-bank Native CDFI SBA lender in the country. The SBLC license designation will allow Alaska Growth Capital to reestablish its ability to lend in underserved markets outside of Alaska, starting with Hawaii, Washington, and Montana.
Making History
The track of oil and gas development in Alaska shows the footprints of bold companies and hard-working individuals who shaped the industry in the past and continue to innovate today. The May 2024 issue of Alaska Business explores that history while looking forward to new product development, the energy transition for the fishing fleet, and the ethics of AI tools in business.