Small businesses require capital to grow. Unfortunately, many loan programs are designed to serve larger businesses. To close the funding gap, the Department of Commerce offers your growing business several loan programs that can help you purchase new equipment, renovate, expand or construct facilities, support early stage product development or repurpose properties that have been abandoned or underutilized due to environmental issues.
Washington State Small Business Credit Initiative (SSBCI)
A combination of lending and investment programs designed for small businesses, the Washington State Small Business Credit Initiative (SSBCI) provides additional capital to Community Development Financial Institutions (CDFIs) and participating lenders to increase the flow of capital to underserved and underbanked communities across the state who have been otherwise left out of traditional funding opportunities.
A portion of all program funding is targeted to Very Small Businesses (VSB) and businesses owned by Socially and Economically Disadvantaged Individuals (SEDI). Working with private financial partners, Commerce has developed several programs to serve the needs of small businesses across the state. Please note that Commerce does not manage these loans. They are managed by our trusted CDFI partners.
This micro loan program works with Community Development Financial Institutions (CDFIs) to address the capital needs of Washington’s smallest businesses and non-profit organizations. The program purchases a portion of these loans, freeing up capital so CDFIs can generate additional loans for small businesses that often struggle to access credit. Calvert Impact Small Business and Grow America administers the loans, serving businesses and nonprofits with 50 or fewer employees and up to $5 million in revenue. Apply through the program’s web portal to be matched with a participating local lender who will work to finalize interest rates and terms.
Learn more at SmallBusinessFlexFund.org
Resources
- Download the FlexFund 2 program fact sheet (PDF).
The program helps small businesses to qualify for financing and lowers their business risk when taking on owner-occupied real estate loans. CRE targets Socially and Economically Disadvantaged Individual (SEDI) business owners and Very Small Businesses (VSBs) with funding for tenant improvements, construction, purchase or refinancing loans. The program offers subsidized loans that lower debt payments with low interest rates and interest-only structured loans, improving your cash flow by freeing up money to invest in business growth. The Heritage Bank Community Development Entity (HBCDE), LLC, administers the program, offering SSCBI companion loans for up to $5 million with 10-year terms.
Learn more by visiting the Heritage Bank NW SSBCI website.
Resources
- Download the CRE program informational fact sheet (PDF).
The CSP is open to participating lenders and is designed to complement the SBA’s 504 Loan Program and assists small businesses having trouble qualifying for financing due to a collateral shortfall in their 504 bridge loan. These funds are dedicated to eligible SBA 504 loans and will address risk exposure and timing differences by providing commercial lending partners with additional collateral during the interim loan period. These loans cover the second mortgage until the permanent SBA second mortgage takeout occurs, with deposits up to 20% of the collateral value as a CD (cash) with the third-party lender.
Evergreen Business Capital Community Finance (EBCCF) administers the CSP. The collateral support amount will not exceed $500,000 per borrower with CD terms between 6 and 18 months. Learn more by visiting the Collateral Support Program website.
This fund meets the growing demands of small businesses across the state by offering upfront capital with loan repayment based on a percentage of the business’s earnings. The Grow America Community Impact Loan Fund (Grow America CILF) and other CDFI partners offers these revenue-based investments with fixed pricing, rather than charging interest. The repayment variable ranges from 1.1x to 1.5x base investment, established on monthly or quarterly revenue.
The RBF fund program offers two products:
- Micro business RBF investments. Denkyem Co-op’s Scale loan provides working capital between $10,000 – $100,000 to support entrepreneurs growing their businesses.
- Business growth RBF investments. Grow America CILF’s Ajust product will provide financing of working capital, equipment, and machinery in amounts between $101,000 and $500,000 to existing businesses to support growth.
Learn more by visiting the Revenue-Based Financing Fund program website.
Resources
- Download the RBF program fact sheet (PDF).
- Download the RBF loan program fact sheet en español (PDF).
The Washington SSBCI Venture Capital (VC) program provides $49 million in equity capital support by investing funds with Washington-based fund managers, including those with diverse management teams. The program will invest in up to three venture capital funds that offer early-stage support for Washington business growth. These funds focus on investing in underserved startups or targeted investment objectives such as social equity, climate tech innovations, information technology, AI and machine learning.
- Flying Fish Partners: Based in Seattle, they are an early-stage venture firm focused on investing in high-potential AI and ML technology companies in the U.S. and Canada.
- Pier 70 Ventures: With locations in Indianapolis, New York, San Francisco and Seattle, they provide vital resources, connections, and support for entrepreneurs to scale up their companies and drive transformation in healthcare.
- VertueLab: This nonprofit offers funding to fight climate change with a focus on on climate technology startups to speed the transition to a sustainable and low-carbon economy.
For more information about this program, please email the SSBCI Program team: SSBCI@Commerce.wa.gov.
Other programs
Resources
When will Washington State’s SSBCI programs launch? The programs are expected to become available in 2024 for businesses to apply through contracted lending and equity partners.
Will there be grant funding available through SSBCI programs? No. The SSBCI funds are implemented as loans or equity investments only; the programs do not offer grants.
How does a small business apply for the SSBCI program funding? Small businesses do not apply directly to Commerce for funding. Applications will be made through separate program pages managed by the fund administrators and or program participating lenders. Information for how to apply will be posted as the programs become available.
How does Treasury define a Very Small Business (VSB)? A VSB refers to a business with fewer than 10 employees at the time of loan application and or investment. It includes independent contractors and sole proprietors.
How does Treasury define a Socially and Economically Disadvantaged Individual-owned (SEDI) business? In the SSBCI Capital Program Policy Guidelines (PDF), “meeting the needs of SEDI-owned businesses” means that the SSBCI funds are for loans, investments or other credit or equity support to:
Business enterprises that certify that they are owned and controlled by individuals who have had their access to credit on reasonable terms diminished as compared to others in comparable economic circumstances, due to their:
- Membership of a group that has been subjected to racial or ethnic prejudice or cultural bias within American society, including gender, veteran status, limited English proficiency, disability, long-term residence in an environment isolated from the mainstream of American society.
- Membership of a federally or state-recognized Indian Tribe.
- Long-term residence in a rural community.
- Residence in a U.S. territory.
- Residence in a community undergoing economic transitions (including communities impacted by the shift towards a net-zero economy or deindustrialization)membership of an underserved community (see Executive Order 13985, under which “underserved communities” are populations sharing a particular characteristic, as well as geographic communities, that have been systematically denied a full opportunity to participate in aspects of economic, social, and civic life, as exemplified by the list in the definition of “equity,” and “equity” is consistent and systematic fair, just, and impartial treatment of all individuals, including individuals who belong to underserved communities that have been denied such treatment, such as Black, Latino, and Indigenous and Native American persons, Asian Americans and Pacific Islanders and other persons of color; members of religious minorities; lesbian, gay, bisexual, transgender, and 10 queer (LGBTQ+) persons; persons with disabilities; persons who live in rural areas; and persons otherwise adversely affected by persistent poverty or inequality).
- Business enterprises that certify that they are owned and controlled by individuals whose residences are in CDFI Investment Areas, as defined in 12 C.F.R. § 1805.201(b)(3)(ii).
- Business enterprises that certify that they will operate a location in a CDFI Investment Area, as defined in 12 C.F.R. § 1805.201(b)(3)(ii).
- Business enterprises located in CDFI Investment Areas, as defined in 12 C.F.R. § 1805.201(b) (3) (ii).
Owned and Controlled, Definition:
- If privately owned, 51% is owned by such individuals.
- If publicly owned, 51% of the stock is owned by such individuals.
- In the case of a mutual institution, a majority of the board of directors, account holders, and the community which the institution services is predominantly comprised of such individuals.
Where can I find more program information about the State Small Business Credit Initiative (SSBCI)?
For more information regarding the State Small Business Credit Initiative (SSBCI) program, please visit the U.S. Department of Treasury’s SSBCI program page.
Remember, These SSBCI funds are implemented as loans or equity investments across the state. This program does not offer grants.