Frequently Asked Questions

To be eligible for a Flex Fund loan, a small business must meet the requirements detailed below. Please note that the pre-application should be completed and submitted by the owner of the business with the largest ownership interest, and that all owners with more than 20% ownership will be required to attest to the information provided.

The following criteria is the minimum required for a business or nonprofit to be considered eligible for a loan under this program:

• The business or nonprofit must employ 50 or fewer employees;
• Have been in operation for at least one year prior to the date of application
• Have less than $5 million in gross annual revenue
• Demonstrate ability to repay the loan through previous and projected cash flow
• Have existing operations in Washington state

The Washington Small Business Flex Fund 2 works with a network of community-based lenders with decades of experience helping Washington’s small businesses and nonprofits from underserved and underbanked communities. These community lenders can assist you through every step of the loan process. The Fund also aims to reduce barriers to financial resources by removing credit score or specific collateral requirements and origination fees charged outside of closing costs. Loan funding can be spent flexibly based on your business’s needs and goals.

No specific collateral is required to be eligible. You do not need to have access to any specific real estate or equipment. However, a blanket first or second lien will be filed on business assets, and your lender may request additional, specific collateral. Personal guarantees will be required for individuals who own 20% or more of a business.

Yes, the main office or business location primarily benefiting from the loan must be located in Washington, and the intended use of proceeds must be used in Washington.

What makes the Washington Small Business Flex Fund 2 truly unique is the network of nonprofit, community-based lenders and technical assistance providers. For more than 40 years, these Community Development Financial Institutions (CDFIs) have been dedicated to helping local small businesses and nonprofits thrive. CDFIs exist to meet the unique needs of historically underbanked communities and have years of experience lending to borrowers in these communities.

The funding provided through the Washington Small Business Flex Fund 2 is intended to strengthen communities and the small businesses and nonprofits that help them thrive. The voluntary background information provided by pre-applicants helps us ensure that the program is reaching small, local businesses who most need the funding.

When you complete the pre-application questionnaire on this website if you are an eligible borrower, you will be matched to a local, community-based lender who can assist with every step of the full loan application and direct you to additional technical support services.

36- TO 72-MONTH TERMS
Borrow up to $250,000
Interest rates currently range from 8.5-11.5% (as of December 18th, 2024) depending on the length of the loan*
Fixed interest rate for the life of the loan
No prepayment penalties
*This range is 1-4% above the current WSJ prime rate of 7.5%, a national base rate determined by the 10 largest U.S. banks.

Washington Small Business Flex Fund 2 loans can be used for a full range of business needs including:

• Payroll
• Rent and utilities
• Building improvements
• Marketing and advertising
• Supplies and other business expenses

Loans may not be used for:

• Passive real estate investments
• Lobby activities,
• Engaging in securities trading
• Activities that are prohibited by Federal or Washington state law, or certain other prohibited activities.

You will be required to detail the proposed use of loan proceeds when you fully apply to the community lender.

Due to a limited amount of funding availability and the high volume of pre-applications expected, it is anticipated that not all pre-applicants will be able to receive a loan. Further, please note that submitting a pre-application is not an indication of eligibility and does not mean that a loan will be approved or funded. More information will be requested in your full application with your matched lender to determine your loan eligibility. The time it takes to process a pre-application will depend on the volume of pre-applications received by the matched community lender.

After you complete the quick pre-application questionnaire on this website, your matched community lender will guide you in gathering the following documentation for the full loan application:

• Two most recently filed tax returns, if available and required by the lender;
• Bank statements and/or internally generated financial statements;
• Information regarding business owner(s) with more than 20% ownership, including name, address, SSN, EIN or ITIN, phone number, email, percentage ownership, and photo ID;
• Executed Attestation Form (to be provided by the community lender);
• Evidence of legal formation of business or nonprofit entity (e.g., articles of incorporation and bylaws);
• Personal guarantee (for businesses only); and
• Other documentation required by the community lender at or after the time of the application

Your matched community lender will reach out to you to collect the required documentation, conduct any credit checks and finalize the full application review process.

Ineligible businesses are:

• Cannabis businesses or firms engaged in activities that are prohibited by federal law or applicable law in the jurisdiction where the business is located;
• Passive real estate investments or the purchase of securities
• Firms engaged in lobbying activities or pyramid sales schemes
• Facilities primarily used for gambling or to facilitate gambling
• Businesses engaged in speculative activities that develop profits from fluctuations in price rather than through the normal course of trade, such as commodity futures trading or passive real estate investing
• Businesses that earn more than half of their annual net revenue from lending activities, except for Community Development Financial Institutions and Tribal enterprises that are not depository institutions or bank holding companies
• Businesses seeking to repay delinquent federal or state income taxes, unless the small business borrower has a payment plan in place with the relevant taxing authority

The Washington Small Business Flex Fund 2 is NOT a forgivable loan or grant program. The borrower will need to pay back the full amount of the loan with interest over 3-6 years, depending on the loan.

If you do not make a loan payment on time, you may be assessed a late fee at the discretion of the community-based lender. A failure to pay may result in the loan being declared in default. During the full loan application process, your community-based lender will discuss the full terms of your loan agreement to ensure you understand the details regarding late payment and default.

Yes, when you fill out the Washington Small Business Flex Fund 2 pre-application questionnaire, even if your business does not match with a lender’s current criteria, you can still match to a program technical assistance provider. Please be sure to check-off additional support categories you are seeking when filling out the pre-application questionnaire. After you find the support you need, you can pre-apply for a lender match again at a later date.

No. While the program has adopted minimum eligibility criteria that are required to pre-apply (for example, at least one year of operations, fewer than 50 employees, less than $5 million in annual revenues), the participating community lenders also determine their own lending criteria.

An applicant that fails to meet the criteria set by the lenders will not receive a match and will be offered a match to a program technical assistance provider instead, as long as they check-off additional support categories while filling out the pre-application form. The program seeks a diverse group of participating lenders who offer the broadest possible coverage across geographies, industries, and other factors to achieve the highest possible match rate with program pre-applicants.