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Loans help small businesses in Federal Way
Small business owners in Federal Way will have a few new loan programs available to them, thanks to the city's Economic Development Department and its Business Assistance Program (BAP). The BAP will offer three types of low-interest loans to help get businesses going here in the city.
"Supporting small and new businesses is a priority for strengthening the local economy," said Patrick Doherty, community and economic development director for the city. "The Business Assistance Program fills a gap in the local economy and will lead to business success and job creation."
The funding for the BAP comes from a $400,000 allocation from the city's annual Community Development Block Grant (CDBG) funds.
CDBG funds are federal funds from the Department of Housing and Urban Development, and are a source of funding the city recently took over itself, after a longtime relationship in a consortium with King County and local municipalities.
According to the city, there are three loan programs available through the BAP:
• Small Business Loan Program: Provides loans from $25,000 to $75,000 for commercial businesses. Borrowers are required to create at least one job for a low-to-moderate-income person for every $35,000 they borrow. In this loan program, the funding is required to be matched with private capital and the city requires security for its portion of the loan.
• Microenterprise Loan Program: Offers smaller loans between $5,000 to $25,000 with a focus on small entrepreneurs. There is no private-capital match required in this program.
• Commercial Business-Exterior Improvement Program: Provides up to $10,000 in matching funds in the form of a zero interest, five-year, forgivable loan to commercial building owners within the city. As the name implies, this program is aimed at incentivizing building owners to take advantage of it to freshen up building facades and stop urban blight from spreading more throughout the city.
Doherty said he hopes that the small business and microenterprise programs will "generate a revolving fund that will continue to invest in the community's small and new businesses."