DC BizCAP - Collateral Support Program for Entrepreneurs and Small Businesses

The Collateral Support Program (CSP) 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 CSP provides funds for deposit with a participating lender (a participating bank, credit union or community development financial institution) to provide the necessary collateral to cover the borrower’s collateral shortfall. The CSP’s collateral is drawn down and returned, for use by other business, to DISB over the life of the loan.

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 must be District residents

  • Business owner must provide a personal guaranty

  • Closing and annual fees of up to 4%

  • 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

Eligible Lenders

  • Insured Depository Institutions

  • Insured Credit Unions

  • Community Development Financial Institutions (CDFIs)

Currently, there are 10 participating lenders (see list of DC BizCAP Participating Lenders). Additional lenders may apply to participate in the CSP.

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

Go here for more information and a list of participating financial institutions

FUNDING ALERTAnacostia BIDDC BIZCAP