If you’re a small business owner looking for a loan but lacking collateral, the Washington State Department of Commerce this week unveiled a program that could be of assistance.
The new revolving loan fund will help increase access to credit through the Washington Small Business Credit Initiative, the department said in a release, noting that “small businesses are a key engine of growth in our state economy, accounting for more than 40 percent of all private-sector jobs and over $200 billion in gross revenue last year.”
Important though they may be, some businesses “often struggle getting conventional loans to help them expand,” the department said.
Using funds from the U.S. Treasury Department’s State Small Business Credit Initiative (SSBCI), Washington’s new Collateral Support Program “will support efforts by local banks to lend funds to small businesses”
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“Finding ways to increase the flow of capital to credit-worthy enterprises is crucial to growing our state economy,” said Gov. Jay Inslee in the release
“We are excited to roll out the Collateral Support Program because it offers another financing resource to help the small businesses in our state that are so critical to our economic vitality and job growth,” said Brian Bonlender, Commerce director. “This program is a self-sustaining solution, and will build upon the success of the existing State Small Business Credit Initiative finance programs to incentivize private lending which to date has been in excess of $54 million.”
The new Collateral Support Program will allow businesses to continue working with their current lender to access funding available through the SBA 504 loan program. SSBCI provides financing by providing cash collateral for small businesses that lack the necessary collateral to qualify for bridge loan. The new program will mitigate a lender’s risk during the interim period before an SBA-guaranteed loan is in place, the department said.
Most small businesses can qualify for Collateral Support Program, and most SBA 504 loan purposes qualify. Examples of qualifying business loans include: heavy equipment, acquisition of a place of business and construction or renovation of a place of business.
The department is working to quickly enroll and approve more banks, credit unions, savings associations and other business lenders in the program. Benefits to lenders include minimal reporting requirements, expanded small business customer base and higher lending limits.
Applications for support in raising collateral from the program may be made at local lenders who participate. The program is aligned with SBA 504 loans.
Lenders and businesses interested in learning more about the Washington Small Business Credit Initiative and the new Collateral Support Program may contact Jane Swanson, Commerce Program Manager, 206-256-6155, or emailWSBCI@commerce.wa.gov, or visit www.commerce.wa.gov.