By Aaron Allen, The Seattle Medium
Last week, Seattle Mayor Bruce Harrell and the Seattle Office of Economic Development (OED) announced the launch of a Capital AccessProgram, a new collaboration with community development financial institutions (CDFI) that will link small businesses to working capital loans. OED is investing $3 million in Coronavirus Local Fiscal Recovery Funds (CLFR) and $5 million in funding from the Equitable Communities Taskforce (ECI) to finance the program.
“For a true pandemic recovery, our small businesses must have real support from the City of Seattle, and this new capital access program means significant and tangible resources to make an immediate impact,” said Harrell. “I’ve heard loud and clear that Seattle’s small businesses need financial support andtrust in City government. This new capital access program represents action and proof that we’re listening, an urgent investment of recovery dollars and a real commitment to support thriving small businesses in our city.”
The new capital access program will leverage city funding to bring down the cost of Washington State Small Business Flex Fund loans for eligible small businesses by paying down 25% of the loan principal.
Small businesses can borrow up to $150,000 with 4% interest to use on business expenses such as payroll, building improvements/repairs, supplies, marketing and advertising, utilities and rent and other business expenses.
According to Seattle City Councilmember Sara Nelson, chair of the Council’s Economic Development Committee, for minority-owned, small businesses working to recover, who may be lacking the resources needed to regain financial footing through normal banking channels, the new capital access program is a lifeline that can help them recover from the economic impacts of COVID-19.
“This new capital access program meets the urgent needs of small businesses trying to recover from the pandemic, especially BIPOC- and immigrant-owned small business owners who often lack sufficient equity to secure loans through regular banks or have greater challenges navigating the loan application process,” said Nelson.
“Not only will this program help entrepreneurs get a loan, it will also ease their long-term debt obligation. That’s precisely the kind of investment we need to make to help stabilize our struggling small businesses, retain jobs, and reduce displacement in our most vulnerable communities,” added Nelson.
To be eligible for the Small Business Capital Access Program, small businesses must be a for-profit, small business located within the Seattle city limits, have experienced direct economic disruption due to COVID-19, and meet at least two of the following three factors:
• Have no more than $5 million in annual revenue in 2019 or 2020.
• Have no more than 50 full-time equivalent employees.
• Have no more than two locations.
“This $8 million investment is going to help the small businesses that we cherish in our communities,” said Markham McIntyre, Interim Director of Office of Economic Development. “As we emerge from the pandemic, small businesses are asking for access to capital and this program will help connect businesses to the financial and technical assistance resources they need to recover and thrive.”
The National Development Council along with other local organizations and businesses are enthusiastic and optimistic about the partnership with the City of Seattle in support of small businesses.
“We are thrilled to be a part of this partnership between community financial development institutions and the City of Seattle to support small businesses. We are excited that Seattle businesses who most need support will have additional funds available to them through this new OED and Flex Fund partnership,” said Chuck Depew, Senior Director at National Development Council. “We look forward to carrying out our mission of addressing the needs of businesses in historically under resourced and underbanked communities and, in turn, fueling an equitable recovery for Seattle’s smallest businesses.”
To apply for flexible working capital loans through the City’s Capital Access Program, eligible small businesses must first submit a Flex Fund application online at smallbusinessflexfund.org/seattle. Applications will be accepted from March 8, 2022, through April 8, 2022 at 5:00 p.m.
