Appalachian Community Capital Initiative
In June 2013, the Appalachian Regional Commission (ARC) announced the creation of Appalachian Community Capital (ACC), a new central bank for development lenders that will increase the availability of capital to small businesses in the 13-state Appalachian Region.
For growing businesses in Appalachia, finding capital is difficult, as a number of systemic factors have limited the sources of available capital. According to recent studies, Appalachian small businesses receive only 82 percent of the loans of their comparable counterparts nationally, while businesses in Appalachia’s economically distressed counties receive less than 60 percent of the loans of their national counterparts. To address this gap, ARC, along with participating community loan fund partners in the Region, has committed to establishing a new source of funding for development lenders and helping capitalize it with $42 million over the next 24 months. This new central bank is expected to leverage $233 million of private bank capital and help create 2,200 jobs.
Appalachian Community Capital will raise grant capital and leveraged debt from funding sources not available to or underused by individual funds, such as regional and national banks, utilities, and national foundations. Because this new central bank will pool the capital needs of all its members, it can attract investors that are seeking to place larger amounts of money.
For more information: www.arc.gov/news/article.asp?ARTICLE_ID=402.