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Rep. Bob Hasegawa, serving the 11th District Serving parts of South Seattle including Beacon Hill, Georgetown, South Park, Allentown, Boulevard Park, part of North Highline Unincorporated Area, Burien, City of Sea-Tac, all of Tukwila and Southcenter, the southern and eastern parts of Renton, Fairwood, Benson Hill and adjacent unincorporated areas of King County. |
Hasegawa pushes for more funds to aid small businesses
Linked Deposit Program to get $75 million for minority, veteran and women-owned businesses
February 19, 2008
OLYMPIA — During a late evening session today, the House of Representatives passed a bill (HB 3360) that will add another $50 million to the existing $150 million authorized in the Linked Deposit Program for minority and women-owned businesses, and $25 million in the Veterans Linked Deposit Program.
“Small businesses are the backbone of our economy but they face many challenges,” said the bill’s sponsor, Rep. Bob Hasegawa, who Vice Chairs the Finance Committee. “The Linked Deposit Program is a true engine to growing small, certified businesses, which in turn benefit the economy.”
The Washington State Linked Deposit Program was first created in 1993. It links the deposit of state funds to loans made by financial institutions to certified minority and women-owned businesses. The State's funds are used to encourage banks to lend to these businesses and buy down the cost of the loans to the small businesses.
“Last session we increased the funding to $150 million because the existing funds were used up immediately since the waiting period for these loans can be very long, sometimes it takes over two years,” explained the Seattle democrat. “The need is overwhelming but the program really works, so this year we’re not only adding another $50 million for minority and women-owned businesses, but also $25 million for veteran-owned businesses. Overall this is a very sound investment.”
Hasegawa’s new legislation would authorize the State Treasurer to use up to $225 million of short-term state treasury surplus funds for the Linked Deposit Programs. The $25 million for veterans will be held for exclusive access by their certifying agencies.
Qualifying loans are:
• made to certain minority, veteran, or women's business enterprises;
• for a period not to exceed 10 years;
• for up to a maximum amount of $1 million for each individual loan;
• at an interest rate that is at least 2 percentage points below the market rate that normally would be charged for a loan of that type; and
• with points or origination fees that are limited to 1 percent of the loan principal.
To be eligible the applicant must:
• be a minority, veteran and/or a women;
• have at least 51 percent of ownership of the business; and
• control the business.