disb

Department of Insurance, Securities and Banking

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.

The District of Columbia Department of Insurance, Securities and Banking (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) 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 participating lender. Borrowers can also reduce their debt service by utilizing enhanced loan participation options offered through the program.

In an Enhanced Loan Participation transaction, the District can offer a subsidized interest rates to the borrower and/or subordinate its portion of the loan to the participating lender if one or more of the following economic development goals are met.

  • The borrower employees District residents, including hard to hire
  • The business is located on a Great Street or in a Low-Income Census Tract
  • The business is a Certified Business Enterprise (CBE) or minority/woman owned business (MBE).

Individuals or businesses should contact a participating lender to start the loan process or visit disb.dc.gov/smallbusinfo for more information. Contact DISB at (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 11 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

City First Enterprises

1 Thomas Circle NW
Suite 700
Washington, DC 20005

cfenterprises.org

 

(202) 745-4490

City First Bank of DC

1432 U St. NW
Washington, DC 20009

cityfirstbank.com

(202) 243-7113

First National Bank

20300 Seneca Meadows Pkwy.
Germantown, MD

fnb-online.com

(202) 815-4478

FVCBankcorp, Inc

1301 9th St. NW
Washington, DC 20001

fvcbank.com

(202) 628-5500

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

Navy Federal Credit Union

Washington Navy Yard
9th and M St. SE, Bldg. 22

navyfederal.org

1 (888) 824-6328

Fulton Bank

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

fultonbank.com

1 (866) 950-5784

Sandy Spring Bancorp, Inc.

1299 Pennsylvania Ave. NW
Washington, DC 20004

sandyspringbank.com

1 (800) 399-5919

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