D.C. Mun. Regs. r. 27-851

Current through Register Vol. 71, No. 24, June 14, 2024

Rule 27-851 - SMALL BUSINESS CAPITAL ACCESS FUND

851.1

The Department shall implement and administer the Small Business Capital Access Fund ("Fund") established pursuant to Section 2375 of the Act (D.C. Official Code § 2-218.75). The Fund is a financing tool designed to sustain and/or increase the level of business activity, job creation and retention, and provide access to capital for the sustainability and expansion of designated categories of certified business enterprises ("CBEs").

851.2

Monies issued from the Fund may be structured as a grant, loan loss reserve funding, senior or subordinated secured or unsecured loan, loan guarantee, collateral, surety, or any other financial assistance, and any issuance of monies from the Fund shall serve a public purpose identified by the Department. The Department may, in its discretion, issue grants to assist qualified businesses with credit facility origination or the provision of financial-based professional services (e.g., grants to assist with hiring a certified public accountant, bookkeeper, escrow agent, bonding agent, qualified non-profit organization, financial institution, or professional service provider).

851.3

To be eligible for funding from the Fund a recipient must:

(a) Be certified or eligible to be certified, pursuant to the Act as a small business enterprise ("SBE") or disadvantaged business enterprise ("DBE");

(b) Be independently owned, operated, and controlled;

(c) Be in good standing with the Department of Consumer and Regulatory Affairs; and

(d) Have a Certificate of Clean Hands from the Office of Tax and Revenue.

851.4

The following business enterprises are ineligible to receive funding from the Fund: consumer and marketing cooperatives; dealers of rare coins and stamps; enterprises engaged in gambling; enterprises engaged in illegal activity; lending firms and loan packaging firms; enterprises engaged in multi-sales distribution; nonprofits; enterprises engaged in pyramid schemes or multi-level marketing schemes; real estate investment firms; non-profit institutions; and businesses engaged in speculation.

851.5

To the extent consistent with the grant agreement or other agreement between the Department and an eligible recipient, the recipient may use proceeds from the Fund for the following purposes:

(a) Working capital;

(b) Inventory;

(c) Acquisition or repair of furniture, fixtures, machinery, or equipment;

(d) Ecologically efficient improvements;

(e) Purchase or implementation of financial management systems (e.g., point of sale, upgrades to meet prime contractor standards);

(f) Leasehold improvements;

(g) Property renovation; or

(h) Financial and/or Procurement-based professional services.

851.6

The Department will develop underwriting criteria and rates and terms for funding from the Fund. Such criteria will include, at minimum, the maximum funding amount(s), interest rate(s) and any applicable deferral periods, term limits, security or collateral requirements and fees and costs. The Department will include the underwriting criteria with the application and/or publish the underwriting criteria on its website. The Department may modify the underwriting criteria as necessary to account for changes in budgeted amounts of the Fund or changing needs of the local business community. The Department may work with a qualified non-profit organization or financial institution to develop or modify, as necessary, the underwriting criteria.

851.7

An eligible recipient seeking funding from the Fund shall submit a written application to the Department or to a qualified non-profit organization and/or financial institution designated by the Department on such form or forms as may be prescribed or approved by the Department. The application shall include, at a minimum, submission of the following documents and information:

(a) Current CBE Certification and evidence that the applicant is certified as an SBE or DBE or evidence that the applicant is eligible to be certified as a SBE or DBE;

(b) Clean Hands Certification from the Office of Tax and Revenue;

(c) Certificate of Good Standing from the Department of Consumer and Regulatory Affairs;

(d) Financial status of the applicant, including current and past tax returns, balance sheet(s) and profit and loss statements;

(e) Amount of funding from the Fund requested by the applicant;

(f) Reason for requesting funding from the Fund; and

(g) Any other information or documents the Department may require in order to assess the applicant's eligibility and/or credit worthiness.

851.8

Within sixty (60) days of receipt of a complete application, the Department or its non-profit or financial institution partner shall notify the applicant whether the funding request has been approved, denied, or if additional information is needed to make a determination. If an application is denied, the Department or its non-profit/financial institution partner shall provide the applicant an explanation of the underwriting determination.

851.9

The Department may, in its discretion, require the potential borrower or borrower to participate in targeted training, technical assistance, and/or periodic monitoring to help strengthen business operations as a condition of funding from the Fund or as a pre-condition for future funding.

D.C. Mun. Regs. r. 27-851

Final Rulemaking published at 56 DCR 8439 (October 23, 2009), incorporating by reference text of Proposed Rulemaking published at 56 DCR 5622, 5654 (July 10, 2009); as amended by Final Rulemaking published at 59 DCR 8536 (July 20, 2012); amended by Final Rulemaking published at 70 DCR 10970 (8/11/2023)

Authority: The Commissioner of the Department of Insurance, Securities and Banking ("DISB"), pursuant to the authority set forth in section 2372 of the Small, Local, and Disadvantaged Business Enterprise Development and Assistance Act of 2005, effective October 20, 2005 (D.C. Law 16-33; D.C. Official Code § 2-218.72 (2011 Repl.)) (Act) and Mayor's Order 2012-69 dated May 17, 2012