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Credit Enhancement Programs

ADFA can provide a company with a bond guaranty thereby improving its debt or credit worthiness. Through programs like ADFA's Bond Guaranty Program, investors are provided with reassurance that the borrower will honor their obligation.


Provides a source of capital to Arkansas small business enterprises.

Qualifying small businesses perform governmental and/or private contract work, including service contracts.

  • ADFA provides a loan guarantee to lenders up to 80% of the first $200,000 loan amount with maximum loan guarantee of $160,000.
  • Lenders then provide capital through loans to small businesses to adequately finance their working capital needs.

Loans are at a market rate for a term of 180 days with an optional renewal for an additional 180 days.Cost of the guarantee is 1% per 180 day maturity with another 1% due if optional renewal is exercised, for a maximum of 2%.An ADFA loan guarantee can be used in conjunction with other ADFA programs such as Capital Access.


  • Helps obtain financing for labor and materials necessary to complete specific governmental and/or private contracts.
  • Builds your lender relationships.


  1. Small business with an opportunity to bid on a contract will contact a lender for a line of credit loan and determine the amount of working capital necessary to complete the contract.
  2. Once a contract is awarded, complete the required documentation for formal approval from the bank.
  3. After the bank approves the loan, the application will be forwarded to ADFA for its approval and issuance of the Loan Guarantee Agreement.
  4. Initial ADFA approvals will be issued by an ADFA Loan Committee, with ratification by the full Board at the subsequent meeting.


  • Details of the project, contract history and work experience of contractor
  • Applicant financial statements, credit information, loan repayment ability in the event of default
  • Collateral availability and borrower’s personal guarantee
  • Contractor’s ability or inability to secure conventional financing
  • Values of contract in comparison to loan request

Contact Our Team

Chuck Cathey, Vice President of Development Finance

Chuck Cathey

Vice President of Development Finance
Send an Email(501) 682-5906

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