Artificial intelligence is streamlining access to money for small businesses, leveling the playing field for rural communities. That’s the message Small Business Administration Deputy Administrator Dilawar Syed heard on Aug. 26 from University of Alaska Small Business Development Center leaders. He also heard about work to extend outreach to rural and underserved communities.
Jackson Brossy, Diné, is assistant administrator of the SBA’s Office of Native American Affairs. He said he has visited a few Alaska communities, including Bethel, which reminded him of the Navajo Nation. “It’s a place that when I was there I saw a lot of similarities to the place where I grew up, with about a 40% poverty rate, a 40% unemployment rate. And there are no banks in our communities … I see a lot of those similarities in rural Alaska to other parts of rural Native America.”
SBA Acting Regional Communications Director Norma M. Lucero agreed the lack of banks in rural Alaska is an issue. “So for example, in Yakutat, the nearest bank is in Juneau, flying from Yakutat to Juneau to get any banking services is about $600, $700 round trip ticket. That’s just the ticket; that doesn’t include the hotel or anything. So in-person banking is a real challenge in rural Alaska.”
Jon Bittner, executive director of the Small Business Development Center, explained some of the other problems many of Alaska’s entrepreneurs face. For instance, he said small businesses don’t have a deep bench of staff to specialize in learning about government programs. “We can educate them that (the programs) exist, but in terms of the nuances of walking them through how the process works, there’s a barrier, particularly the further outside the cities you get. So realistically half the state is going to have even greater difficulty than normal accessing these programs just because of accessibility, sophistication, size, and ability to meet regular lending criteria,” he said.
Bittner said the development center, working with a coalition of lenders, local governments and tribes, is “going to be launching one of the most aggressive outreach and training efforts that the state’s ever seen to try and solve this exact problem. The funding will be deployed over the next three to five years. We’ve partnered with the Alaska Federation of Natives and with several Native Community Development Financial Institutions.” In a prepared statement, the center said the Small Business Credit Initiative Tribal Program will deploy over $83 million from the Department of the Treasury to drive private sector investments into rural and Alaska Native-owned businesses across the state.
One of the cornerstones of getting financing is a business plan. Bittner said the center is using artificial intelligence to help people fill out forms that collect the necessary data. He said it’s a different kind of technological advancement.
“Most of what’s come before has required the end user to have some sort of familiarity with technology, digital literacy, some sort of precursor to the technology that has come before,” Bittner said. “With AI, because the interactions are so natural, intuitive, conversational, we’re able to deploy fairly advanced tools or training that don’t require almost any sophistication on the end user’s part because we can get you there. You can ask the questions that you need to get the sophistication you want within the tool itself.”
“A lot of folks have difficulty with some of the terminology,” Bittner said. “But within the business plan template itself, it will ask you a series of questions and it will ask more and more questions to refine the answers so that we can fill it out at the end. And then at the end of it, it should generate a fairly robust business plan that then we can work with you on to sort of polish and refine to the end of the game. “
He said the template has been deployed to about 20 states, where it’s dramatically reduced processing times. “What used to take them days they could turn around in 20 minutes. So they were able to process thousands. The states loved them; the businesses loved them. Things worked out great. That’s the kind of thing that we can do, that it didn’t require any special technology on their part, the users, it was very intuitive for them and we can replicate that in particular in rural areas,” Bittner said.
Syed praised the technology as one that can be used as a role model in other states and programs. It can also help increase awareness.
“If people know you, they’ll call you. SBA will do a great job. But generally we don’t get out and promote. And a lot of times I go up in places that are super underserved, whether it’s the Black business communities in the Deep South or Asian communities in parts of California that don’t even know what SBA has,” Syed said
He also mentioned a recent regulatory change that opens the door for the formerly incarcerated to access capital. Before, if you had a criminal record but even if you had taken care of it, you would be automatically denied federal loan guarantees. Now, “you’re not ineligible to apply. You still have to go through the process to get approved. The banks have to go through the underwriting, but the lender is no longer: ‘Sorry, but that’s a no from the get-go,’” Syed said.
Bittner said being able to create your own job by creating a small business is a path to prosperity in rural areas. “We’re huge fans. SBA has done a great job of keeping us informed of all these things and we’ve really gone because we’ve been trying to find ways to work with the formerly incarcerated for a while. It’s a difficult prospect that this is one of the best tools we’ve seen.
The Small Business Administration also held a tribal consultation on regulatory changes to the SBA 8(a) program, which gives advantages to tribal and Native Hawaiian small businesses and Alaska Native corporations in federal contracting. ICT will have a report on that at a later date.
ICT originally published this article. ICT is an an independent, nonprofit, multimedia news enterprise. ICT covers Indigenous peoples.
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Publish date : 2024-09-02 02:00:00
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