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We appreciate the opportunity to provide input regarding the forthcoming policy and guidelines around the SSBCI program. Some guiding principals that are behind these recommendations include; flexability, empowering the State's ability to meet the need of our local businesses; Equity, ensuring policy guidelines and reporting requirements supports access to funds by underserved communities. By using the questions proposed by the Department of Teasury in the RFI, we propose the following:

Expand Access to Capital

* The greater flexability the State has to effect change in the area of equitable access to capital is critical. Allowing innovative approaches to breaking down barriers will assist States with preventing "K" shaped recoveries. For example, exclude lines of credit from the initial match requirement, allow debt to be used in the leveraged dollars definition and consider tiered interest rates based on income level.

* Identify through Treasury guidance that Tribally licensed businesses are eligible for funding.

Small Business Support

* Provide the flexability to utilize SSBCI funds to operationally support the CDFI network. Capacity remains the greatest challenge for these organizations to provide the level of technical assistance required to support our underbanked communities.

* Expanding the definition of "private financing" would allow the State to increase its leverage dollars in a time when the pandemic has limited these opportunites. Which is a challenge in the best of times. Extending the "Allocation Time Period Private Leverage Ratio" out to 2030, as opposed to the 6 year requirement, would provide greater flexability to address funding challenges.

* Engaging with trusted community messengers to provide outreach and TA to small businesses has proven critical to the success of reaching underserved communities. Treasury needs to provide assurances that information used to participate in programs by SEDI businesses will be soley for the purposes of those programs.

Technical Assistance Allocation

* Current SSBCI funding allocation for technical assistance to can be used for "Accounting", "Legal", or "Financial" advisory services. Futher clarity on what qualifies as services under this heading is required to ensure compliance of acceptable use of funds. Idealy, the use of technical assistance funding would be broadened to reflect support for the efficacy of SSBCI programs.

* Treasury contracting with MBDA to provide the following:

- Free online training in the evenings and weekends (sessions hosted in multiple languages/ designed by and for tailored demographics)

- Offer live technical assistance phone center operators to help navigate programs o Media campaign coordination with states/tribes

* Regarding Treasury directly contracting with legal, accounting, and financial advisory firms to provide TA to SEDI businesses; it is our position that these services should be funded from Treasury but contracted by the State for the following reasons and purposes:

- SEDI and minority-owned businesses need these services to be local choices

- The State will partner with existing organizations and networks that are already trusted messengers to various multi-cultural and mainstream communities

- Prioritize businesses requesting assistance with financial literacy (managing payroll, documentation, filing taxes, etc.)

- Contract with organizations to provide business operations and management training that address common challenges for small business owners

Example: As part of our Opportunity Zone with underserved/underrepresented communities, we learned that although these communities and businesses had very compelling projects, they were not investment-ready, and they did not have connections to investors. In response, Commerce worked with a TA organization with deep roots in our state to help get these projects investment-ready. As part of that work, the TA organization worked with these communities and businesses to identify specific services (legal, accounting, etc.) they needed. We and TA organization then awarded grants to the community/business for them to contract directly with services in their community. This ensured that they were able to work with a trusted partner. In addition, providing the grant to the business to pay the service provider, empowered them by making it clear who the client was.

Reporting Requirements

* What is required to ensure successful implementation of SSBCI funding is timeliness, consistency and transparency on policy and reporting guidelines.

* Within State law and regulation, reporting on the program's impact regarding an equitable distribution based on geographic and demographic impact.

Once again, we appreciate the chance to weigh in on the SSBCI program design and implementation in order to support new and existing small businesses. It is our hope that this information is taken in consideration. It is our belief that this will enhance the primary goal of working toward an equitable recovey from an unprecedented pandemic.

Respectfully,

The Washington State Department of Commerce Team

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The notice can be viewed at: https://www.regulations.gov/document/TREAS-DO-2021-0009-0001

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