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DC BizCAP - Loan Participation Program

The Loan Participation Program (LPP) is part of the District of Columbia Business Capital Program (DC BizCAP), which is funded by the U.S. Treasury State Small Business Credit Initiative (Initiative). The Initiative, a $1.5 billion fund, was established by the Small Business Jobs Act of 2010 to assist small businesses and entrepreneurs who were adversely affected by the economic recession of 2008 and the credit crisis that followed. The District of Columbia was allocated $13.2 million for District businesses.

DISB established and administers DC BizCAP to provide capital to District small businesses and entrepreneurs who continue to encounter reductions in the availability of credit and heightened requirements to obtain financing DC BizCAP provides critical capital through three programs that provide alternatives to traditional commercial financing to facilitate private lending and investments in District small businesses.

The Loan Participation Program (LLP) is a program that provides loan support for small business which may qualify for loans, but are unable to meet capital requirements or the debt service coverage ratio of the lending institution. Under the LPP, the District buys a portion of a loan originated by a lender to reduce the borrower's debt service.

The LPP also provides enhanced loan participation options. In an Enhanced Loan Participation transaction, the District can offer a subsidized interest rate to the borrower and/or subordinate its portion of the loan to the bank if certain economic development goals are met (e.g. the business hiring targets residents and hard to hire; located on a Great Street or in a Low-Income Census Tracts; and is a Certified Business Enterprise (CBE) or minority/woman owned business).

Individuals or businesses should contact a participating lender to start the loan process, or for more information, visit disb.dc.gov/smallbusinfo or contact DISB on (202) 727-8000.

 

Borrower Eligibility Requirements

  • Non-public company registered in the District and subject to taxation in the District (e.g. a corporation, partnership, joint venture, cooperative, sole proprietorship, District-designated charitable and other non-profit institution)
  • Fewer than 750 existing employees, including subsidiaries and affiliates
  • Principal offices within District (demonstrated by lease or deed)
  • At least 75% of employees, including subsidiaries and affiliates, must work in and provide services in the District
  • At least 25% of W-2 employees are District residents
  • Business owner must provide a personal guaranty
  • Maximum of 50% of commercial loan up to $1 million
  • Principals must not have been convicted of a sex offense against a minor
  • Principals must not have any conflict of interest with the lender, investor or the government
  • For an Enhanced Loan Participation transaction, meet economic development goals

 

Eligible Lenders

• Insured Depository Institutions
• Insured Credit Unions
• Community Development Financial Institutions (CDFIs)


Currently, there are 14 participating lenders (see list of DC BizCAP Participating Lenders). Additional lenders may apply to participate in the LPP.

 

Loan funds may be used for the following authorized purposes:

  • Start-up costs
  • Working capital
  • Business procurement
  • Franchise fees
  • Equipment
  • Inventory
  • Purchase, construction, renovation or tenant improvement of commercial real estate
  • Tangible and intangible property (except goodwill)

 

Loan funds may NOT be used for the following purposes:

  • Speculative activities deriving profits from fluctuations in prices
  • Lending activities (business with more than 50% revenue from lending activity)
  • Pyramid sales
  • Illegal activities
  • Gambling (some lottery exception)
  • Passive investments, including real estate held for sale lease or investment
  • Evangelizing, Proselyting or Lobbying
  • Repayment of Delinquent income taxes
  • Repayment of taxes held in trust or escrow
  • Reimbursement of funds owned to an owner
  • Purchase of ownership interest of an owner
  • Double dipping with other Federal programs
  • Refinancing with the same investor
  • Outside of the District

Financial Institutions Participating in the LLP

Participating Lender

Address

Website

Telephone Number

Amalgamated Bank

1825 K St., NW
Washington, DC 20006

amalgamatedbank.com

(202) 721-0762

Cardinal Bank

1776 K St., NW
Washington, DC 20006

cardinalbank.com

(202) 331-3957

City First Bank of DC

1432 U St., NW
Washington, DC 20009

cityfirstbank.com

(202) 243-7113

City First Enterprises

1436 U St., NW
Washington, DC 20009

cfenterprises.org

(202) 745-4490

Colombo Bank

1600 East Gude Drive
Rockville, MD 20850

ColomboBank.com

(240) 223-1028

Eagle Bank

1425 K St., NW
Washington, DC 20005

eaglebank.corp.com

(301) 986-1800

ECDC Enterprise Development
Group

901 S. Highland St.
Arlington, VA 22204

www.entdevgroup.org

(703) 685-0510

First National Bank

20300 Seneca Meadows Pkwy.
Germantown, MD

fnb-online.com

(202) 815-4478

Industrial Bank

4812 Georgia Ave., NW
Washington, DC 20011

industrial-bank.com

(202) 722-2000

Latino Economic Development
Center

641 S St., NW
Washington, DC 20001

ledcmetro.org

(202) 588-5102

Revere Bank

820 West Diamond Ave., Suite 110
Gaithersburg, MD 20878

reverebank.com

1(866) 950-5784

United Bank

7845 Wisconsin Ave., NW
Washington, DC 20018

bankwithunited.com

(301) 280-7625

Washington Area Community
Investment Fund

2012 Rhode Island Ave., NE
Washington, DC 20018

wacif.org

(202) 529-5505

Washington First Bank

1025 Connecticut Ave., NW
Washington, DC 20036

wfbi.com

(202) 587-7014