Just over a year after its launch, the Arizona Microbusiness Loan Program is already making an impact on entrepreneurs across the state.

Gov. Katie Hobbs launched the program in 2024 through the Arizona Office of Economic Opportunity (OEO) to close funding gaps for the state’s smallest businesses. The program set aside $5 million in state funds to provide low-interest loans, financial education and support for microbusinesses with five or fewer employees.

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“These businesses are Arizonans. They’re local, they’re here. They are critical to everything that we do, and we need to support them,” OEO Director Mary Foote said.

Arizona is home to roughly 85,000 microbusinesses, which OEO Marketing and Communications Manager Jeff Hecht calls “the backbone of the Arizona economy”.

To support these businesses, the state budget provides program funding to the OEO, which distributes the money to lending partners who then administer the loans. The $5 million does not need to be repaid to the state.

Instead of traditional banks, the program selected 10 community-based lending partners to distribute low-interest loans.

Hecht said the partners were chosen for their focus on community-driven lending and cover every corner of the state, including all 22 federally recognized tribal lands.

“It’s critical to our economy to understand how to support these microbusinesses,” Foote said. “By being able to give them the opportunity and resources to scale their businesses, we’re going to be working directly toward that goal of an affordable and thriving economy.”

One of businesses to receive funding in the program’s first year is Imagine Wellness Chiropractic Centers in Phoenix.

Owner Roxane Zamora runs her practice with one other employee and said that the program has reduced financial pressure, allowing her to focus on client wellness.

“It really does give me financial stability and financial security,” Zamora said.

The stress-free application process eased Zamora’s financial strain and the uncertainties of running a microbusiness.

“You can have a great month, and then the next month can be unpredictable,” Zamora said.

Seven months after receiving the loan, Zamora said it provided her business with steady income and allowed her to continue contributing to her community.

Zamora encourages other business owners to take advantage of the support and put aside the embarrassment of asking for help.

“Don’t be afraid. Don’t be embarrassed. Reach out,” Zamora said. “That’s what it’s there for.”

Maria Aguirre, lending director at Border Financial Resources, one of the community lending partners, said that her organization focuses on clients who do not fit in the square box of a bank.

Aguirre and her team provide clients with tools, resources and guidance to build a foundation for long-term growth.

“These clients are not only becoming business owners but changing their own lives and creating community wealth.” Aguirre said.

With a background in banking, Aguirre said she knows firsthand the challenges clients face when they don’t fit the mold of a traditional bank or lack financial education.

“Without financial education a business will fail,” Aguirre said. “We have the tools and resources where we can educate these clients or guide them to where they need to go.”

Aguirre said the program has already made a visible difference in the Arizona community.

“If we can continue this path that the governor has given us, we can change communities,” Aguirre said.

The program will run through June 2029, but Foote expects the $5 million to be drawn down before then.

“We will be working and fighting to get more dollars to continue to support the program,” Foote said.