Small Business Loan Program
The City of Federal Way currently offers three programs that use CDBG funds to directly assist local businesses: Small Business Loan Program, Microenterprise Loan Program, and the Commercial Business Exterior Improvement Program. The Community Development Block Grant (CDBG) program is sponsored by the U.S. Department of Housing and Urban Development (HUD) and it is administered locally through the City of Federal Way.
The Small Business Loan Program provides very low interest loans that help small businesses create and/or retain jobs for low- and moderate-income individuals. The loan sizes are from $5,000 to $75,000, and proceeds can be used for working capital, existing building improvements, equipment purchases, leasehold improvements, new construction, debt refinance, real estate acquisition or rehabilitation, and loan guarantees.
The City of Federal Way Council has designated the City of Federal Way CDBG Loan Review Advisory Committee (LRAC) as responsible for the review of all CDBG Loan Fund requests. Funding decisions relative to all CDBG loans shall be made by the City Council upon a recommendation by the LRAC and the Mayor. All project funding is on a first-come, first-served basis while program funding is available. The City Council makes decisions annually to re-capitalize CDBG program funding.
Please fill out the online application to apply for a CDBG Small Business Loan.
For further information, contact Community Services Manager Jeff Watson at (253) 835-2650, or firstname.lastname@example.org
|Loan Size||$5,000 up to $75,000|
|Interest Rate||Prime + 1% (depending on credit quality and collateral)|
|Collateral||Liens on business assets, receivables/inventory, and personal and/or coporate guarantees; with a declining balance equal to the outstanding loan balance, when appropriate.|
|CDBG Requirements||CDBG funds are provided to for-profit businesses to benefit a low- to moderate-income person, and/or to create one FTE job for each loan awarded. The 2014 HUD Income Guidelines can be accessed here.|