The Washington State Department of Commerce has teamed up with Community Sourced Capital to launch Fund Local, an innovative crowdfunding platform that will enable small businesses in all 39 counties in the state to access zero-interest loans from the community.
The initiative adds a highly useful statewide Washington economic development program for growing small businesses while also fostering community engagement, and all without any government funding.
Through the Fund Local program, established businesses in Washington State will be able to borrow in between $5,000 to $50,000 as a loan from the community, to be used for expansion and growth.
Businesses can launch a 28-day crowdfunding campaign using this platform. Community members who want to support a particular business can pitch in with $50 increments, known under the program as “squares.” Once funded, the business will have three years to pay back the loan to its squareholders.
Governor Jay Inslee said in a release announcing the launch of the program that “There’s Buy Local, Eat Local and now Fund Local — I’m excited to kick off this new avenue for people to help employers grow successful businesses and provide jobs in the communities they love.”
As part of the partnership, the Washington Dept. of Commerce will connect CSC with economic development organizations in each county in the state in order to identify businesses that would make good candidates for the Fund Local program.
WA Department of Commerce Director Brian Bonlender said in the release that they support innovative economic development tools that assist communities, especially in rural areas, while supporting job creation strategies for small businesses.
Seattle-based Community Sourced Capital is a Certified B Corporation with a mission to build innovative financial systems that generate sustainable, affordable ways for circulating capital in local communities.
CSC has helped 50 businesses raise nearly $900,000 from a total of more than 3,800 lenders. This includes $157,050 loaned through the Fund Local program to Washington State businesses in four counties where it is already active.
Community Sourced Capital CEO Rachel Maxwell said in the release that CSC is honored to partner with the state on such an important project, adding that small businesses have a very difficult time getting traditional loans and Fund Local offers a new way for them to get capital from local residents.
Residents in turn get to support local businesses and the economy. Bonlender added that the Fund Local strategy builds community economic strength from within, allowing communities to support their local businesses.