Development Block Grant Float
Loans Project Qualifications
Community Development Block Grant (CDBG) Float Loans are
available to businesses from the Washington State Office of
Trade and Economic Development (OTED) through cities and counties
which are eligible to receive Washington State Small Cities
Community Development Block Grant Program assistance.
An eligible city or county may apply for a grant under this
program in order to extend a short-term loan to a private
business entity under the following conditions:
- The business must demonstrate that public financing of
the project is appropriate to create or retain jobs.
- The business must provide an unconditional, irrevocable
of Credit in U.S. dollars in the full amount of the principal
interest due, as collateral for the loan.
- The business must agree to create jobs and make
the majority of them available to qualified lower income
candidates. Retention of jobs can also be considered
as a qualifying factor.
- The business must agree to enter into an agreement
with OTED and the local job service center to obtain
referrals of qualified job candidates.
- The business must agree to comply with all applicable
federal, state, and local laws and regulations.
Terms of the Grant/Loan
- Interest paid quarterly, and principal balance will be
maturity or on demand, whichever occurs first. Loan
terms are limited to 30 months maximum.
- The interest rate on the Float Loan will be negotiated
on the contribution the project will make to job creation
retention, but will typically be at or below prime.
Note: Funds extended under the CDBG Float Loan Program are
already committed to other jurisdictions that anticipate using
the funds when the loan matures. While OTED structures a
Float Loan with every expectation that the loan will not be
called prior to maturity, there is a possibility that the
loan may be called early to honor the original commitment.