Proposal calls for Arizona to guarantee small business venture capital loans

Arizona taxpayers may guarantee venture capital loans to small businesses if a controversial proposal recently introduced to the state's legislature is passed, the East Valley Tribune reports.

According to John Adam Kowalski, former chairman of the Arizona Small Business Association and proponent of the bill, such legislation is necessary to offset the struggles entrepreneurs face when attempting to secure funding through traditional lines of credit such as bank loans.

"(Small businesses are) not able to grow because they don't have the funding," explained Senator Michele Reagan, a Scottsdale Republican, as quoted by the news source. "We're losing out on a lot of money that could be infused into our own economy for people that need jobs ... or for the small businesses that have a great idea and need that capital to expand."

However, opponents of the plan cite the possibility that guaranteeing loans could cost the state money - a loss taxpayers would be forced to absorb.

Last month, Arizona's seasonally adjusted unemployment rate was 9.3 percent - slightly higher than the national average of 9.1 percent.