The Department of Commerce has opened applications for Small Business Flex Fund loans, allowing businesses or nonprofits to apply to borrow up to $150,000 from community lenders at an interest rate between 3% - 4.5%.
As Washington state begins to reopen, the Department of Commerce has opened applications for Small Business Flex Fund loans. A business or nonprofit may apply to borrow up to $150,000 from community lenders at an interest rate between 3% - 4.5%, with no fees and interest-only payments for the first year. Businesses will be subject to interest rates between 4% - 4.5%, while nonprofits will have rates between 3% - 3.5%.
The loan may either be a five-year or a six-year loan, however, unlike the Paycheck Protection Program (PPP) loan, the Small Business Flex Fund loan is not eligible for forgiveness and the full amount of the loan plus any interest will need to be repaid. The uses of the loan funding are flexible, and include payroll, utilities, rent, marketing, advertising, building improvements or repairs, along with other business expenses.
Who is Eligible for a Small Business Flex Fund Loan?
While the Small Business Flex Fund intends to emphasize loans for historically underserved businesses and those in low-income communities, this is not a requirement, and dental practices are eligible for the loan as long as the below criteria are met.
For a small business or nonprofit to be eligible:
- the main office or headquarters of the business must be located in Washington state;
- the business or nonprofit must employ 50 or fewer full-time equivalent employees;
- the annual revenue must be less than $3 million per year; and,
- the business or nonprofit must have experienced a direct economic disruption as a result of COVID-19.
What Materials Will I Need to Apply?
A business can apply for the loan on the Small Business Flex Fund website. To apply for the loan, a business will need to supply:
- the most recently filed tax returns, if available and required by the lender;
- bank statements and/or internally generated financial statements;
- information regarding the business owner(s) with more than 20% ownership, including name, address, SSN, EIN or ITIN, phone number, email, percentage ownership, and photo ID;
- an executed Attestation Form (to be provided by the lender);
- a brief description of how COVID-19 has impacted your business;
- evidence of legal formation of the business (examples include articles of incorporation or bylaws);
- businesses will need to provide a personal guarantee;
- a description of the purposes for which the loan will be used (payroll, rent, business repairs, or new equipment, for example); and
- any other documentation required by the individual community lender at or after the time of the application.
Following an application, the lender will reach out to collect the required documentation, conduct any credit checks, and finalize the application review process. It is important to note that depending on the number of applications and as applications are reviewed on a rolling basis, it is possible that not all applicants will receive a loan.
Loan applications are now open, for more information and to apply, please visit the Small Business Flex Fund website.