New Commerce program aims to incentivize equitable access to credit for small businesses
Contributions in exchange for tax credits will fund grants to eligible lending institutions to provide services and investment capital for small businesses lacking access to traditional bank loans.
OLYMPIA, WA – The Washington State Department of Commerce has launched a new program to address inequities in accessing capital for small businesses. The Equitable Access to Credit Program, created by the state legislature (HB 1015), creates a new funding mechanism to help Community Development Financial Institutions (CDFI) offer technical assistance services, small business training, and loans and investments to borrowers who may not be eligible for traditional bank loans.
“This program is a win-win for businesses and communities. Contributors to the grant fund receive tax credits, and in turn, enable small business owners who have faced barriers to accessing traditional sources of assistance and funding,” said Washington Commerce Director Mike Fong, “Unlocking the tremendous potential of small businesses only enriches and strengthens communities and local economies.”
Commerce will award up to $8 million annually to CDFIs using funds generated by contributions from businesses in exchange for tax credits. Any business with state B&O tax liabilities can now contribute to the program and receive a $1 for $1 tax credit through the Department of Revenue.
“The Washington Community Investment Coalition is excited to partner with the Washington State Department of Commerce to expand access to responsible capital for many more of Washington’s underserved businesses and residents,” said Joe Sky-Tucker, board president of the Washington Community Investment Coalition. “This funding marks a strong commitment to equity and inclusion by the state of Washington, and we look forward to being part of this work.”
The Equitable Access to Credit Program encourages community and economic development in communities that have historically lacked access to capital. At least 65 percent of the value of all grants awarded in any calendar year will be provided for CDFI’s serving or investing in tribal communities and rural counties.
Contributions for 2023 are now being accepted through Commerce’s website: Equitable Access to Credit Program – Washington State Department of Commerce. The grant program is anticipated to roll out by the end of 2023.