Grow Your Business

GROW your business

Do you want to expand your business?

Expanding a business can require many different things, including money, employees, new locations, and new markets.

Money

Money can come in the form of loans, invested capital, tax incentives, bonds, and other forms. For one-on-one assistance to discuss financing options, consider meeting with the Washington Center for Women in Business or SCORE advisor (free and confidential). For general financial information, see the following links:

Loans

There are a variety of business lenders, and all business lenders and banks have multiple different loans and lines of credit. All banks have unique specialties for either specifics type of businesses or bank products (credit card, Line of Credit, Loan, Home Equity Loans, Commercial Loans). “SBA loans” are actually loans made through commercial banks and credit unions that are guaranteed by the federal government, in this case the U.S. Small Business Administration. The U.S. Department of Agriculture has business loan guarantee programs that are handled similarly.

Business loans typically require the “5Cs”

Before lending money, reputable financial institutions will want to know that certain conditions are met, frequently referred to as the 5Cs:

  • Capital/Cash – This is the owner’s cash investment. Typically, owners are expected to bring 25–30% of a new business’s start-up costs. With an expansion loan for an established business, owners are typically expected to show equity in the business equaling at least 25% of the loan amount, or to bring in additional cash so that the sum of the added cash and the equity will total at least 25%.
  • Capacity/Cash Flow – Evidence that the business owner has the ability to start and run the business successfully. The owner’s industry experience, business training, and management experience, in combination with a well-developed business plan, will help establish capacity. For existing businesses, the firm’s financial records will be important for demonstrating profitable operations and good financial management. A cash flow projection is typically for both new and established businesses. The projections need to show the ability of the business to meet its financial obligations, including making loan payments, and to withstand unexpected events.
  • Collateral – The owner needs to pledge something of value. Typically, collateral includes business property, furnishings, fixtures, equipment, and inventory, plus owner assets outside of the business (real estate, stock, etc.).
  • Character – The lender will want evidence that the owner takes responsibility seriously. This is partially demonstrated through the owner’s credit history.
  • Conditions – The lender will also want to see the overall environment (economy, industry trends, and market forces) supports the business’s potential for success.

Business lenders

  • Community Development Financial Institutions (CDFI) helps communities thrive economically by providing essential access to basic financial services, affordable credit, and investment capital, particularly for low-income communities and individuals who have historically faced limited access to these resources. WA CDFI list.
  • Banks and credit unions for standard commercial loans.
  • Banks and credit unions for SBA 7a loans (can be used for any business purpose) and U.S. Department of Agriculture guaranteed loans.
  • U.S. Small Business Administration Microloans (loans up to $50,000 for any business purpose).
  • U.S. Small Business Administration 504 lenders (for real estate and major equipment purchases): Northwest Business Development Association, Evergreen Business Capital, Ameritrust CDC.

Investment Capital: Many businesses grow using funds from investors. The word “investor” implies that the individual or group has partial ownership of the business. The act of securing investors and private lenders, whether family members, friends, or strangers, is highly regulated and requires an understanding of securities laws.

Below are some groups in Washington that connect investors with entrepreneurs. There is a comprehensive list of resources on the Startup website.

Washington State offers limited financial assistance in the form of grants and loans, bonds, incentives, and tax exemptions for some industries.

Grants are available for small businesses to help cover the costs of hiring temporary employees when a member of your team uses Paid Family and Medical Leave. To be eligible for these grants, your business must average 150 or fewer employees. Businesses that average fewer than 50 employees must pay the employer portion of the premiums to be eligible.

Businesses certified as Woman or Minority Owned Businesses are eligible for the Washington State Office of Minority and Women’s Business Enterprises Linked Deposit Program. This program grants certified businesses access to affordable capital with an interest reduction of up to 2% through participating lenders. Veteran and Service Member Owned Businesses are eligible for the Veteran Linked Deposit Program.

Employees

Having employees with the right attributes and skills for your business is critical for successful growth. There are resources to help you with employment planning, including Labor Market Information.

Providing employee benefits, such as health insurance, can help a business owner recruit talented employees and keep valuable ones. The Washington Health Benefit Exchange offers resources to help you learn about individual health coverage options and/or can connect you with a certified broker to help you find the right plan for your business. (See section Employee Benefits – Health Insurance under “Plan Your Business”).

In addition, offering employees options for Retirement Savings keeps your business competitive, may provide you with tax incentives, and is easy and affordable to set up through the Retirement marketplace.

There are also programs to help you find and train qualified employees:

Setting up required employer accounts

To set up workers’ compensation insurance, it is necessary to update your Washington State business license.  If you say YES to hiring employees in your application, workers’ compensation and unemployment insurance accounts will be automatically opened. The following steps are required as an employer in the state of Washington. To submit a new hire report, employers need to provide their name, address, and Federal Employer Identification Number (FEIN). They will also need information found on the employee’s W-4 Form, including their name, address, and Social Security Number (SSN), plus the employee’s date of hire and date of birth.

Update your Washington State business license with the Washington State Department of Revenue/Business Licensing Service and indicate you are going to have employee(s). For customer service, call 360-705-6741.

  • Once the application and employee endorsement is processed, the Washington State Department of Labor & Industries (workers’ compensation) and Washington State Employment Security Department (unemployment insurance) will open up accounts for the business in 2–4 weeks. You will receive a packet in the mail from L&I with your account number, your rates, and contact information for your Washington State Department of Labor & Industries account manager. You will also receive the required Washington State Department of Labor & Industries workplace posters to hang in your workplace. If you have employees working remotely, you can email them PDF versions of the posters found here as well as access a list of other required federal and state posters.
  • When the time comes, file your workers’ compensation insurance quarterly reports online here. The due dates you need to report by are:
    • April 30 for Quarter 1 (hours worked from January 1 – March 31).
    • July 31 for Quarter 2 (hours worked from April 1 – June 30).
    • October 31 for Quarter 3 (hours worked from July 1 – September 30).
    • January 31 for Quarter 4 (hours worked from October 1 – December 31).

Other information and resources for employers

Employment is an area of significant regulation, including minimum wage, overtime pay, employment of minors and family members, workplace safety, nondiscrimination, etc.

If you are facing a temporary decline in business, the SharedWork Program offers you an alternative to laying off workers. Instead, you can reduce the work hours of your permanent employees, and the workers can collect partial unemployment benefits to replace a portion of their lost wages.

A frequently misunderstood area involves the use of independent contractors. Unless an individual is truly in business for himself or herself, is licensed, files federal and state taxes as a business, actively markets, has multiple clients/customers, and is performing work that is outside the business’ normal activities, chances are state and federal law would require that the individual be treated as an employee.

Employment is also an area of significant recordkeeping and tax responsibilities. It’s important that you understand the regulations and costs as you plan and operate your business.

Labor law

Worker benefits

NOTE: If you have workers in Seattle, Tacoma, or SeaTac, check with your city for minimum wage and other employment requirements.

New locations

Choosing new locations requires you to consider many factors: market desirability, zoning, build-out costs, on-going occupancy costs, access to infrastructure and services, access to qualified employees, etc. Below are tools that will help you make an informed decision.

New markets

General market expansion assistance: Whether you’re considering expansion through new products or services, new customer groups, or new marketing methods, conducting demographic and other types of research prior to moving forward can help you make better and more cost-effective decisions. Do you want assistance with research or development of an expanded marketing plan?

Export assistance: Do you want to sell products or services to customers outside of the U.S.?

Washington State government contracting

The State actively procures public works projects and goods and services from small, diverse, and veteran businesses. To learn how to sell your goods and services to the State, please attend a free and virtual State Contracting Opportunities and Open House on the third Thursday of the month. To register, visit DES.wa.gov and click on Sell to the State tab. You may also contact despieprogram@des.wa.gov.

Government contracting assistance: Do you want to sell products or services to federal, state, or local government agencies?

  • Familiarize yourself with what the state buys. Does the state buy what you sell?
  • Understand how Washington State buys goods and services. Where do you need to be to find potential opportunities?
  • See if there are upcoming opportunities for your business.
  • Look at current and previous examples of solicitations to familiarize yourself with terms and conditions.
  • Connect with available resources for guidance and feedback.
  • Diversity Supplier – Let the Washington State Department of Enterprise Services (DES) help you succeed in your small business as a Diversity Supplier. Your business may be eligible if you are a licensed small business owner and one or more of the following applies to your business: minority owned, women owned, veteran owned, or disadvantaged small business enterprise.
  • Washington APEX Accelerator: Offers free training and advising on all government contracting matters.
  • Prevailing Wage Requirements – Are standard for construction-related contracts, paid for with public funds (all or in part). Public works contractors are required to pay employees at or above the “prevailing wage” that has been established through formal government surveys. Employers must also meet special reporting requirements.
  • Small Business Development Center (SBDC) – Advisors offer one-on-one, no-cost advising.
  • Northwest Native APEX Accelerator – helps Native firms with federal, Tribe, state, and local government contracting through one-to-one assistance with government certifications and registrations, classes and workshops, bid match opportunities, interpretation of solicitations, bid/proposal reviews, marketing advice, and contract performance support for designated socio-economic programs.

The Washington State Office of Minority and Women’s Business Enterprises (OMWBE) certifies small businesses owned and controlled by minority, women, and socially and economically disadvantaged persons. Certified businesses have increased visibility and access to state contracting and procurement opportunities. You can apply for state certification, federal certification, or both. You will need federal certification if you plan to do business on a project funded by the U.S. Department of Transportation.

State
MBE – Minority Business Enterprise
WBE – Women Business Enterprise
MWBE – Minority Women Business Enterprise
CBE – Combination Business Enterprise
SEDBE – Socially and Economically Disadvantaged Business Enterprise
PWSBE – Public Works Small Business Enterprise

Federal
DBE – Disadvantaged Business Enterprise
ACDBE – Airport Concession Disadvantaged Business Enterprise
SBE – Small Business Enterprise

OMWBE Certification

 

The Washington State Department of Veterans Affairs wants to thank you for your service to our country. We are committed to providing you with the information you need and invite you to e-mail or call if you or someone you know needs assistance. If you are also a business owner, you should know that Washington State agencies purchase from Veteran or Service-member Owned Businesses. By linking the WDVA Certified Veteran and Service-member Owned Business list to WEBS, state agencies will now have a way to identify WDVA Certified Businesses AND keep track of how they’re doing toward their purchasing goals. The Washington State Department of Veteran Affairs has teamed up to streamline the registration and certification process for vendors who want to do business with Washington State agencies and municipalities.

Veteran Owned Business Certification

Regulatory compliance

Growing a business may lead to new regulatory requirements. Review the “START” and “RUN” chapters of the Small Business Guide to see if additional regulations may apply due to the nature of the changes in your business.

We wish you success!

Growing a business brings with it rewards, both personal and financial. Planning growth carefully and taking advantage of resources and assistance will help increase your opportunities for success.

Need assistance?

State of Washington Small Business Liaisons can help you get the information and resources you need.

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