There are many roadblocks that small businesses run into, especially when it comes to securing capital. The SBA 504 program offers benefits that serve under-resourced small businesses, but even then, there are circumstances that could disqualify a hopeful entrepreneur from receiving the capital necessary to grow. One critical barrier is insufficient collateral during the SBA 504 interim loan period. That is why CDFIs like CBW Associate Member Evergreen Business Capital Community Finance (Evergreen) partnered with the Washington State Department of Commerce to launch the Collateral Support Program (CSP). This program demonstrates how targeted financial tools can unlock economic opportunity for small businesses across Washington State.

Although SBA 504 loans are a powerful tool for small business growth, a common challenge arises during the interim phase between the bank closing and SBA takeout: collateral shortfall. This often prevents banks from moving forward, especially when projects involve ground-up construction or renovations. The CSP bridges this gap by providing a cash-backed pledge to the lender during the interim period, reducing risk and enabling the deal to close.

One of the first lenders to utilize CSP was Wheatland Bank in Spokane. Their commercial banking officer, Stephanie Sartell, shared, “Using the Collateral Support Program as a credit enhancement to the SBA 504 program is an important tool that supports lenders and business owners in achieving the right financing structure by lowering the bank’s risk during construction before the SBA funding process!”

The CSP’s benefits are felt by the small business owners, as well as the lending partners who utilize it. Black Goat Fitness, a popular, independently run gym in Eastern Washington, sought SBA 504 funding through Wheatland Bank to expand into new locations. Unfortunately, they ran into an issue with a collateral shortfall. Salem Giampietro, owner of Black Goat Fitness, felt disappointed when there was not sufficient collateral coverage for her business’ SBA 504 project. Wheatland Bank utilized the CSP through Evergreen, and Black Goat Fitness was able to secure financing. Salem is now proud to announce that a new location will finish construction by the end of 2025. “When I started this process, I didn’t consider myself prepared, but I have learned a lot about what it looks like to build a business, not just have a job,” said Salem. “Generational wealth and sweat equity seemed impossible five years ago, but we did the hard work to get to this position.”

By reducing risk to lenders and providing capital access to borrowers, the program aligns public resources and equitable lending. For entrepreneurs, this often means the difference between securing a location to grow their operations — or remaining stuck without the real estate assets that build long-term wealth.

The Collateral Support Program is funded through the federal State Small Business Credit Initiative (SSBCI), which will bring a total of $163 million to Washington over 10 years. CSP is one of five distinct lending tools under this initiative designed to increase the flow of capital to underserved communities and strengthen local economies.

“We are proud to manage this program on behalf of the state,” said Patti Kibbe, CEO of Evergreen. “We believe that expanding access to property ownership for underserved entrepreneurs is not just about business growth — it’s about creating pathways to generational wealth.”

The Collateral Support Program is made possible through a collaborative effort between the three Washington-based Certified Development Companies: Ameritrust, Evergreen Business Capital and Northwest Business Development Association (NWBDA). As CSP partners, each organization plays a key role in expanding access to capital for small businesses across the state by helping lenders and borrowers utilize this powerful credit enhancement tool. As Evergreen rolls out the program in partnership with SBA 504 lenders across the state, the impact is clear: More entrepreneurs, particularly those historically left out of traditional lending, have a path forward to finance and own the spaces where their businesses thrive.

Learn more about the Collateral Support Program and sign up at ebccf.org/cspwa.