Washington Small Business Credit Initiative lands $31.5 million in private funding
Innovative public-private partnership produces funding
The Washington Small Business Credit Initiative has attracted $31.5 million in new private investment to support loans to small businesses around the state, the Department of Commerce announced today. Commerce contracts with Craft3, a Community Development Financial institution, to manage a loan fund which helps small businesses, particularly those in economically disadvantaged communities, get the credit they need to grow.
“Small businesses account for about 40 percent of private-sector employment, and over $200 billion in gross revenue last year, yet many small business owners still struggle to get loans since the banking crisis that accompanied the Great Recession. The success of this innovative public-private partnership has attracted additional support from the private financing sector, helping to ensure that financing is available for qualified businesses to expand and create jobs,” said Gov. Jay Inslee.
The investment is from a consortium led by Wells Fargo.
“This is, by far, the largest loan and single source of capital Craft3 has negotiated in its 20-year history,” said Craft3 President and CEO John Berdes. “It fulfills our promise to the State of Washington that we would significantly leverage Small Business Credit Initiative resources to increase investment in small businesses to support job creation and retention, and economic opportunity across the state.”
“I commend Craft3 for their hard work in shaping a successful investment structure that is helping accomplish the job creation objectives of the State Small Business Credit Initiative,” said Commerce Director Brian Bonlender.
Since the start of the Washington Small Business Credit Initiative in 2012, Craft3 has made 25 loans totaling $31.2 million to 20 small businesses.
“The partnership between Washington State Department of Commerce and Craft3 has used $9.2 million in funds from the U.S. Treasury Department’s State Small Business Credit Initiative to leverage $31.5 million in private lending, which will provide more resources to Washington’s small businesses. SSBCI allows each state to design its own small business support programs to help businesses grow and create jobs, and that is what Washington State has done remarkably well with the $19.7 million in total SSBCI funds that they have received to date,” said Cliff Kellogg, Director of the State Small Business Credit Initiative. “The SSBCI program is spurring new private sector lending and investments in small and new companies by leveraging private capital along with the federal support offered by the program.”
Washington Small Business Credit Initiative
The federal Small Business Jobs Act of 2010 directed $1.5 billion to state programs that improve access to capital for small businesses so they can grow and create new jobs.
Washington state received $19.7 million and created several distinct credit programs. Working with private partners, the state expects to leverage these funds and by the end of 2016 drive up to$300 million in new capital to Washington small businesses. . In July 2014, Commerce launched a new Collateral Support Program, a self-sustaining loan program that helps small businesses secure SBA 504 financing with their lenders when collateral support is a concern.