Arkansas Certified Development Corporation (ACDC)

In 1989, the Small Business Administration (SBA), a Federal government agency, asked the Arkansas Capital Corporation (ACC) to manage the operations of its 504 loan program for the state. As a result, the ACC formed the nonprofit affiliate Arkansas Certified Development Corporation (ACDC) to meet this need.

The ACDC, as of 2006, is a member of the Arkansas Capital Corporation Group, an association of six agencies which increase availability of capital for Arkansas businesses. They are, in addition to ACC and ACDC, the Arkansas Capital Relending Corporation, Diamond State Ventures, Arkansas Economic Acceleration Foundation (the educational arm of the group), and Commerce Capital Development Corporation. The parent ACC was organized to ease the shortage of capital funds available to businesses attributed to the Arkansas usury laws and the small size and conservatism of Arkansas financial institutions. Funding for the ACC came from the Arkansas State Board of Finance, public utility firms, commercial bans, and the SBA.

The SBA 504 loan program provides loans to small firms for business expansion. The loans are made for ten- or twenty-year periods at fixed, below-market interest rates. The funds come through the SBA, guaranteed loans and local banks, and the business owner’s equity. The loans are made to any legitimate, for-profit small business, with exceptions—private clubs, real estate speculators, financial lenders, insurance companies (except independent agents), commodity traders, lobbyists, and gambling ventures. The loans are not to be used for interim construction financing. A small business is defined as one with a net worth less than $7 million and average after-tax profits for two years of less than $2.5 million.

The development corporation has been a resounding success. In the Small Business Administration’s five-state Region VI, Arkansas is the smallest state in population but is the second highest recipient loan dollars. The agency uses 504 loans, bank financing, and equity from the borrower. Proceeds are used solely for fixed assets. Fixed assets include purchase of land and buildings, remodeling and expanding existing buildings, new construction, and purchase of machinery and equipment. The loans may also be used for “soft” costs such as interest on construction loans, attorney’s fees, accountant, architect, and appraisal fees, and title insurance. The dollars provided through the Arkansas Certified Development Corporation represent out-of-state capital invested in Arkansas as well as capital raised in Arkansas that would not have been available otherwise.

Funds amounting to nearly $20 million have been used in projects representing a total investment of $50.3 million in the state, as of the end of FY 2005(June, 2005). Additional investments provided by the corporation in long-term fixed-rate loans total nearly $100 million. In addition to the Arkansas Certified Development Corporation, several other institutions, also managed by the Arkansas Capital Corporation, have been created to fulfill the capital needs of Arkansas business; others are in the proposal stage.

The County and Industrial Development Company Act of 1999 authorized two regional industrial affiliate companies. The regional affiliates work closely with ACDC with their primary operations being granting, administering, and monitoring state tax credits. Each of the corporations has a board of eleven members, who represent a cross section of the population of each of the fifteen counties it serves. The regional offices are in Jonesboro (Craighead County) and Fayetteville (Washington County).

For additional information:
Arkansas Certified Development Corporation. (accessed August 10, 2023).

Barton A. Westerlund and Roger K. Chisholm
Little Rock, Arkansas


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