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) – OPEN

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.

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

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? Learn more here.

Collateral Support Program (CSP) – Coming Soon!

The CSP 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 short-term construction loans and will address exposure and timing differences by providing commercial lending partners with bridge loan funds. 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) will administer the CSP. The collateral support amount will not exceed $500,000 per borrower with CD terms between 6 and 18 months.

The program is currently under development and is expected to launch summer of 2024.

Revenue Based-Financing Fund (RBF) – Coming Soon!

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 Fund will initially offer three RBF products:

1. 1. Micro business RBF investments. Denkyem Co-op’s Scale loan provides working capital between $10,000 – $50,000 to support entrepreneurs growing their businesses.

1. 2. Business growth RBF investments. Grow America CILF’s Ajust product will provide financing of working capital, equipment, and machinery in amounts between $85,000 and $500,000 to existing businesses to support growth.

1. 3. Sharia Compliant/Wakalah Product. Business Impact Northwest’s (BINW) Wakalah Financial Product is a Sharia-compliant financial product. This product is based on a revenue redemption equity model and complies with Sharia restrictions against the charging of interest.

Venture Capital Fund – Coming Soon!

Washington State SSBCI funds will participate in three separate venture capital funds dedicated to providing early-stage funding to support the growth of Washington businesses. Venture capital funds have diverse investment teams that 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.

More information on these new programs can be found on this page on the main Commerce website.