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Appalachian Regional Commission (ARC) Federal Co-Chair Earl F. Gohl has 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 organization’s 13-state area. Gohl made the announcement at the Clinton Global Initiative’s America conference with Ray Moncrief, ACC board chair and other officials. The Initiative considers the ACC initiative vital to economic development efforts in Appalachia.

Shaw Canale
, CEO of Mountain BizWorks, serves on the ACC board. “Mountain BizWorks’ participation in the founding and oversight of this initiative translates into a greater ability to make more loans to small business in the Western North Carolina counties we work in,” she said.

Industry analysis indicates that over the past several years, banks across the United States have instituted tighter credit requirements for small-business lending and been less likely to assume risk. Combined with a challenging economic environment, these conditions have left many financially sound businesses seeking new sources of capital.

For growing businesses in Appalachia, finding capital is even more difficult, as a number of 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.

To address this gap, ARC, along with participating community-loan fund partners, 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 — ACC — is expected to leverage $233 million of private bank capital and help create 2,200 jobs.

The bank 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 it will pool the capital needs of all its members, it can attract investors that are seeking to place larger amounts of money.

Gohl underscored the innovative nature of this initiative, saying, “It is better do things together than individually on our own.”

Moncrief added that the community development financial institutions that practice in Appalachia are grateful to Gohl and ARC for their leadership in forming Appalachian Community Capital: “This will be a very valuable source of capital for Appalachian businesses that struggle to access funding,” he said.

— Anna Raddatz is development and communications coordinator at Mountain BizWorks, which helps small businesses start, grow and create jobs through loans, classes and coaching. For more information, call 253-2834 or visit

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