BILL REQ. #:  H-4583.1 

Read first time 01/25/10.   Referred to Committee on Community & Economic Development & Trade.

     AN ACT Relating to the small business loan guarantee program; and amending RCW 43.163.070.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 43.163.070 and 1990 c 53 s 4 are each amended to read as follows:
     (1) The authority may use any funds legally available to it for any purpose specifically authorized by this chapter, or for otherwise improving economic development in this state by assisting businesses and farm enterprises that do not have access to capital at terms and rates comparable to large corporations due to the location of the business, the size of the business, the lack of financial expertise, or other appropriate reasons: PROVIDED, That no funds of the state shall be used for such purposes.
     (2)(a) The legislature finds that many small businesses are experiencing financial hardship because of the economic downturn in the state and nation. The purpose of this subsection (2) is to provide for a program of financial assistance to small businesses that, absent these economic conditions, would otherwise remain viable.
     (b) Until December 31, 2015, the authority shall develop and conduct a small business loan guarantee program of up to three hundred million dollars to provide access to capital for qualified small businesses which are unable to obtain funding from private commercial lenders on commercially reasonable terms or to qualify for federal small business administration loans. Loans made through the program may be for general business purposes, including working capital, machinery and equipment, furniture and fixtures, land and building, including purchase, renovation, and new construction, leasehold improvements, and, under conditions determined by the authority, debt refinancing.
     (c) In conducting the small business loan guarantee program, the authority may:
     (i) Secure or provide guaranties or insurance for small business loans to qualified small businesses or otherwise provide for such loans through an eligible banking organization. For such purpose, the authority may use any funds legally available to it, including proceeds from the issuance of bonds authorized by this chapter; and
     (ii) Adopt rules governing the program, including the terms and conditions of borrower participation in the program and borrower eligibility criteria.
     (d) For purposes of this subsection:
     (i) "Small business" means a business that has its principal office located in Washington and its officers domiciled in Washington, and that is independently owned and operated and together with affiliates has fifty or fewer employees and average annual gross receipts of five million dollars or less over the previous three consecutive years.
     (ii) "Small business loan" means a loan made for use exclusively in Washington to retain or expand a qualified small business.
     (iii) "Qualified small business" is a small business that has demonstrated a reasonable prospect of loan repayment of a small business loan.