Access to Capital

Green plant growing image, evokes business growth

Remember the old saying, “Money doesn’t grow on trees?” Unfortunately, money does make the world go round, especially the world of business. If you’re looking for ways to fuel your growth, check out some of these possibilities.

The #1 request of small businesses is affordable loans. For many businesses, it’s a Catch-22. You need money to get a loan, but you need a loan to get money. This is particularly true for very small businesses or those run by owners in historically underserved communities.

Commerce’s new loan products were made possible by $163.4 million in funds provided through the U.S. Treasury’s State Small Business Credit Initiative (SSBCI). This program aims to promote entrepreneurship, support small business ownership, and increase the flow of capital in underserved communities. A portion of all program funding is targeted towards Very Small Businesses (VSB) and businesses owned by Socially and Economically Disadvantaged Individuals (SEDI).

Working with private financial partners, Commerce has developed five programs to serve the needs of small businesses across the state. As these programs become application-ready, the title of each will be linked to the information you need to apply for a loan.

Note: Commerce does not manage these loans. They are managed by our trusted partners in the financial community.

Small Business Flex Fund 2 (Micro Loan Program)

The program works with participating Community Development Financial Institutions (CDFIs) to address the capital needs of Washington’s smallest businesses and non-profit organizations. The program participates by purchasing a portion of the loans from CDFIs to free up their existing capital and allow CDFIs to generate additional loans for small businesses.

This program focuses on under-resourced and under-banked communities that often struggle to access credit. Eligible Applicants can apply through the program’s web portal and will be matched with a participating lender who will work with the applicant to finalize interest rates and terms.

Once a loan is approved, the Small Business Flex Fund 2 will purchase a portion of the loan, freeing up capital that can be used by Community Development Financial Institutions (CDFIs) to fund additional loans.

The program is administered by Calvert Impact Small Business and Grow America. It serves businesses and nonprofits with 50 or fewer employees and up to $5 million in revenue.

Interested? Visit the Flex Fund website.

Download the Flex Fund 2 flyer (PDF).

Owner-Occupied Commercial Real-Estate Loan Program (CRE)

CRE expands access to capital and reduces lending risks while lowering borrowing costs for small businesses and non-profit organizations by offering a subsidized loan. The program benefits small business owners by lowering debt payments due to low loan interest rates and interest-only structured loan products, resulting in improved cash flow and opportunities for business growth.

The program is designed to assist small businesses in qualifying for financing and lowering their business risk when undertaking owner-occupied real estate loans. CRE targets Socially and Economically Disadvantaged business owners and Very Small Businesses with funding for owner-occupied commercial real estate loans that could be used for tenant improvements, construction, purchase or refinance.

The program is administered by HBCDE, LLC, which will offer companion loans with SSBCI funds and targets loans up to $5 million with 10-year terms.

Interested? Visit the CRE loan program website.

Download the CRE Loan Program fact sheet (PDF).

Collateral Support Program (CSP)

The CSP complements the SBA’s 504 loan program by helping small businesses qualify for financing when there is 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.

Download the CSP loan program fact sheet (PDF).

Revenue Based-Financing Fund (RBF)

RBF was created to meet the growing demands of small businesses across the state. Offering upfront capital with loan repayment based on a percentage of the business’s earnings, the program supports underbanked communities and businesses that could not obtain financing under traditional debt-based loan products.

Grow America Community Impact Loan Fund (Grow America CILF), along with other CDFI partners (CDFI or Implementation Partners), will make revenue-based investments in small businesses across Washington State. Rather than charging interest, pricing will be fixed, with a repayment variable ranging from 1.1x to 1.5x base investment. Repayment is variable and based on monthly or quarterly revenue.

The RBF program will initially offer two products at launch:

1. Micro business RBF investments. Denkyem Co-op’s Scale loan provides working capital between $10,000 – $100,000 to support entrepreneurs growing their businesses.

1. 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.

Download the RBF loan program fact sheet (PDF).

Download the RBF loan program fact sheet en español (PDF).

Venture Capital Fund

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, Flying Fish Partners is 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, Pier 70 provides vital resources, connections, and support for entrepreneurs to scale up their companies and drive transformation in healthcare.

VertueLab
VertueLab is a nonprofit fighting climate change by providing funding and holistic entrepreneurial support to Climate Technology startups that will speed the transition to a sustainable and low-carbon economy.

For more information about this program, contact Kenda Simpa, Program Manager, SSBCI@commerce.wa.gov.

Grant funds are one way that the Washington State Department of commerce fuels ideas and projects to grow jobs and stimulate economic development. Grants offer specific financial support either for targeted project or, depending on the grant, with long-term, sustainable funding that helps organizations grow both programs and infrastructure.

The Evergreen Manufacturing Growth Grant

This particular grant program, with a total of $2 million in funds, is specifically designed to support the development of manufacturing jobs, research and development jobs, and regional cluster acceleration strategies, by fostering an environment of innovation and entrepreneurship. There are two application types available for this program: one form designated for individual businesses, and a second form designated for innovation cluster organizations. Read more about past grant recipients and projects from the 2024 awardee announcement.

The Industrial Site Readiness Grant

The program offers $2 million in grant funding and is open to public entities statewide, including city and county governments, port districts, and Native American Tribal governments. It is designed to enhance large scale site development by providing funding for various site readiness services, which will boost the state’s portfolio of project-ready sites and attract new investment. Read more about past grant recipients and projects from the 2024 awardee announcement.

The Industrial Symbiosis Grant

The Industrial Symbiosis Program is available to entities taking steps to support the reduction, reuse, or elimination of industrial waste to benefit Washington’s circular economy. Grant opportunities are expected to be announced, mid-year. To learn more, visit the Choose Washington State website’s Industrial Symbiosis program page.

STEP Grants

The U.S. Small Business Administration (SBA) State Trade Expansion Program has awarded the Washington State Department of Commerce funding to help state small businesses grow through exporting. Qualifying companies who are new to exports or entering new markets can get up to $10,000 to offset expenses. Eligible reimbursements include expenses for trade show or trade mission fees, airfare, interpreter and translation services, and more. Learn more and connect with the STEP team on the program’s landing page.

Are you considering employee ownership for your business? We can help! The Washington Employee Ownership Program (WA-EOP) is specifically designed to guide those businesses considering a transition to an employee ownership structure. It is administered by the Washington State Department of Commerce and overseen by the Washington Employee Ownership Program Commission.

About the program

Employee ownership refers to an arrangement in which no one person has the most shares or control over an organization. Some of the most common forms of employee ownership include Employee Stock Ownership Plans (ESOPs), Cooperatives (Co-Ops) and Employee Ownership Trusts (EOTs).

Employee Stock Ownership Plans (ESOPs) are recognized under federal tax law as qualified defined contribution retirement plans. An ESOP must be designed to invest primarily in qualifying employer securities and meet certain other requirements. The IRS and the United States Department of Labor share jurisdiction over some ESOP features.
Cooperatives (Co-ops) are member-owned business entities in which worker-owners have a controlling interest, and who elect the governing body on a one-member-one-vote basis.
Employee Ownership Trusts (EOTs) are not recognized as retirement plans under federal law. An EOT is a perpetual trust, in which employees may receive certain financial benefits and governance rights.

Qualifications

For this program, employee-owned business includes the following:

An employee cooperative established under chapters 78 RCW, 23.86 RCW, 23.100 RCW, or 24.06 RCW that has at least 50% of its board of directors consisting of, and elected by its employees; or
An entity owned in whole or in part by employee stock ownership plans as defined in 26 U.S.C. Sec. 4975(e)(7).
“Qualified business” means a person subject to tax under Title 82 RCW, including but not limited to a C corporation, S corporation, limited liability company, partnership, limited liability partnership, sole proprietorship, or other similar pass-through entity, that is not owned in whole or in part by an employee ownership trust, that does not have an employee stock ownership plan, or that is not, in whole or in part, a worker-owned cooperative.
Program support is available to businesses headquartered in Washington State. Its principal place of business is in this state and it is incorporated in Washington.

Learn more

The Washington Employee Ownership Program Tax Credit

The Washington Employee Ownership Commission

Employee Ownership Information and Resources List

Statutory language – S.B. 5096

Final Bill summary – 5096-S SBR FBR 23

Reference materials

Download a WA-EOP Tax Credit summary and fact sheet (PDF).

Download a WA-EOP summary and fact sheet (PDF).

Contact

Lorena Lowell, Employee Ownership Program Manager, WAEOP@commerce.wa.gov

These links are provided for informational purposes only. Washington State and the Department of Commerce do not endorse any of these organizations nor is it liable for the quality or outcome of any relationships entered into.