Access to Capital and Credit for Entrepreneurs and Small Businesses in Appalachia

Author(s): Alexander Flores, Beth Lampson, Cristian Lopez, Jocelyn Walters, Kruti Sheth, Spencer Lau, Tyler Patterson, and Joelle Scillia
Author Organization(s): Next Street Financial, LLC
  • surveys the economic landscape of small businesses and entrepreneurs in Appalachia, 
  • outlines the available capital supply, and
  • calculates the demand for such capital. 

The report also considers the significant and lasting effects of the COVID-19 pandemic on this economic landscape. Based on the existing supply and capital sources, the research points to core needs across Appalachia and proposes solutions to address barriers and improve capital flow.

Read the press release, download the report and explore findings below.

Key Findings

Small Businesses Operating in Appalachia (2020)
Percentage of All Appalachian Business Considered “Small” (2020)
Average Annual Amount of Unmet Capital Needs (2017-2022)

Small Businesses Drive Economic Vitality

In 2020, small businesses made up 99% of all businesses in the Appalachian Region. However, these businesses face barriers to capital access that impede their success and, in some cases, their survival.

The report estimates unmet capital demand represents a $70 billion growth opportunity in Appalachia. 

Solutions for Increased Access

Based on key findings, the report provides a set of solutions, including:

  • Increase ability of regional and community lenders to access and structure capital for small businesses.
  • Consider the loan size and unique credit needs of entrepreneurs in Appalachia.
  • Connect local capital resources and coordinate programs.
  • Build capacity of capital providers.

Meeting Capital Needs in Appalachia

The Next Street research team had in-depth conversations with more than 25 organizations working throughout the region, which provided local perspective and on-the-ground insights. Nineteen of those organizations have used, or are currently using, ARC funding to address the aforementioned gaps in capital access. Explore some of their stories below.