City Invests $8 Million in Economic Recovery Funding to Connect Small Businesses to Operating Capital
Press Release For Immediate Release
New partnership with Community Development Financial Institutions will allow small businesses to borrow up to $150,000 in operating capital to support economic stabilization and long-term recovery
Seattle (March 2, 2022) — Today, Seattle Mayor Bruce Harrell and the Seattle Office of Economic Development (OED) announced the launch of the Capital Access Program — a new partnership with local community development financial institutions (CDFI) that will connect small businesses to flexible 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 Capital Access 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 Mayor Harrell. “I’ve heard loud and clear that Seattle’s small businesses need financial support — and trust 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 lower 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, utilities and rent, supplies, marketing and advertising, building improvements or repairs, and other business expenses. Applications open on March 8, 2022, and must be submitted by April 8, 2022, at 5 p.m.
“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 citywide Councilmember Sara Nelson, Chair of the Economic Development Committee. “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. I applaud Mayor Harrell, OED, and our CDFI partners for their innovative leadership and I look forward to future opportunities for creative collaboration.”
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.
- Meet at least two of the following three factors:
- No more than $5 million in annual revenue in 2019 or 2020.
- No more than 50 full-time equivalent employees.
- No more than two locations.
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 p.m. Applicants will need to provide the following documentation during the application process:
- Most recent tax returns.
- Bank statements and financial statements.
- Information regarding all business owner(s) with more than 20% ownership interest.
- Brief description of COVID-19 impacts on the business.
- Evidence of legal formation of business entity (for example, articles of incorporation and bylaws).
- Other documentation required by the lender at or after the time of the application.
Community Development Financial Institutions will review Flex Fund loan applications and directly notify small businesses of their application status as they are received. The community lenders will determine if small businesses qualify for a loan and the amount of the loan based on financing need and ability to repay the loan. The City’s funding support will be determined according to 25% of each businesses approved loan amount.
Eligible businesses that submit a Flex Fund loan application will also be eligible for additional resources provided through the Capital Access Program including financial counseling, technical assistance and connection to other community-based resources.
“This $8 million investment is going to help the small businesses that we cherish in our communities. 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,” said Markham McIntyre, Interim Director of Office of Economic Development. “As I begin my time at OED, I am proud of the innovative partnerships and recovery investments the staff have organized over the past year and look forward to our ongoing work in pursuit of an equitable economic recovery for Seattle.”
“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 assist businesses in successfully applying for the flexible capital loans, OED and Business Impact NW will host virtual information sessions to explain financing details, eligibility, how to apply, resources to assist with the process and answer individual questions. Information and application assistance will be available in multiple languages, including Amharic, Arabic, Chinese, Korean, Russian, Somali, Spanish, Tagalog, Thai, and Vietnamese. In addition to virtual information sessions, Business Impact NW will provide video tutorials, Frequently Asked Questions and answers, and individual support to assist small businesses throughout the application process. Information sessions will be held:
- March 3, 2:30-3:30 p.m. This virtual session is available in English and Spanish. To register, please visit this registration link.
- March 17, 2:30-3:30 p.m. To register, please visit this registration link.
- March 28, 2:30-3:30 p.m. To register, please visit this registration link.
Businesses can request support from OED such as language access services, disability accommodations, materials in alternate formats and accessibility information by calling (206) 684-8090 or emailing firstname.lastname@example.org. Businesses who need bilingual interpretation support for virtual sessions should register two weeks in advance.
“I am so happy to see this program move forward. I remain hopeful that the outreach to small business owners that can benefit from these resources will be intense and the funding will help small businesses recover and get on a path to establish generational wealth to mitigate centuries of systemic discrimination, gentrification and displacement,” said Donna Moodie, owner of Marjorie Restaurant, and former ECI taskforce member. “I hope the wealth of this city is shared with the budding entrepreneurs who are the fabric of creativity and innovation in Seattle!”
To date, the Small Business Flex Fund, administered by NDC, has provided loans totaling over $31.1 million to 374 small businesses across Washington. Nearly 80 percent of businesses are Black, Latinx, Asian, Alaska Native, Pacific Islander, Native Hawaiian, women, LGBTQ+, and veteran owned.
Through the Capital Access Program, the city continues to support economic recovery as it pivots to longer-term interventions that help small businesses recover from the impacts of COVID-19, stabilize and thrive. In addition to the Capital Access Program, OED has invested more than $7 million in neighborhood recovery grants, $4 million in stabilization grants for small businesses, launched Shop to the Beat — a recovery program that matches local musicians with small retail businesses to provide in-store performances during peak business hours, help increase foot traffic and sales for retailers, and provide competitive pay for musicians who lost significant income due to the impacts of COVID-19, and launched Seattle Restored—an economic recovery program that matches small businesses and artists with vacant commercial storefronts for pop up shops and art instillations in downtown neighborhoods such a Westlake, Pioneer Square, Chinatown/International District, and Belltown.
ABOUT THE SEATTLE OFFICE OF ECONOMIC DEVELOPMENT: The Office of Economic Development (OED) is committed to building an inclusive economy in the City of Seattle. OED works at all levels of our local economy to support small and micro businesses; partner with neighborhood business districts; support creative business sectors, workers and special event organizers; partner with key industries that drive innovation, job growth and global competitiveness; and invest in our local workforce with an emphasis on young people, low-income earners as well as unemployed and underemployed adults. As the city transitions from emergency COVID-19 response, OED will play a leading and critical role in near- and long-term economic recovery and community resilience efforts. Visit the OED website for more information on the department’s programs and services.