Washington State business funding: tech, farms, ports and coffee

Pacific Time: send early

Washington is three hours behind our Eastern business hours.

A 9 a.m. submission in Seattle is noon in the East, and there is plenty of the day left. A 2 p.m. submission is 5 p.m. Eastern, and same-day is unlikely. Gather three months of bank statements first, then submit early in your morning. Same-day delivery applies to approved, complete files.

Western Washington: Seattle, Tacoma, Bellevue

The Puget Sound region combines technology, aerospace, maritime trade, healthcare and a large service sector.

Seattle and Bellevue are known for technology, retail headquarters and aerospace. Tacoma and Everett have ports, shipbuilding and manufacturing. Restaurants, coffee shops, breweries, contractors and creative studios fill the neighborhoods. Costs are high, and so are expectations for fast delivery.

Small firms in the supply chain of large employers often wait on net-60 invoices. A line of credit or working capital bridges that delay.

Eastern Washington: orchards, wheat and wine

Yakima, Wenatchee, the Tri-Cities and Spokane have a different economy.

Apples, cherries, hops, wheat and wine grapes drive much of the region. Growers, packers, haulers and equipment dealers run on harvest cycles. Spokane adds healthcare, education and manufacturing. A packer might buy bins and hire crews months before apples ship. Equipment financing suits tractors and sorting lines, while a line of credit suits crew costs. See agriculture.

A payback example

Seasonal hires should pay for themselves inside the season.

Illustrative example. A Wenatchee packer borrows $60,000 for temporary crews and supplies at total repayment of $72,000 over six months, or $12,000 a month. The crews let the packer handle $200,000 of additional fruit at an 8 percent margin, or $16,000 of margin. After a $12,000 cost, the net is $4,000. A thin margin of safety. Packers should test a weaker harvest too. The post on how much funding you can afford shows how.

No state income tax, but check your taxes

Washington has no personal income tax, though business taxes apply.

Washington levies a business and occupation (B&O) tax on gross receipts, which differs from a profit-based tax. Ask your accountant how it affects margins before you plan payments. Taxes change, so verify current rules.

Technology, creative and service firms

Seattle-area service businesses often grow fast and carry high payroll.

An agency or software consultancy with $60,000 in monthly revenue may spend $45,000 of it on people. A late payment from one client can strain payroll even if the year is strong. A line of credit sized to one payroll cycle usually fits better than a large lump sum. Draw when needed, repay when the invoice clears, and keep the balance small. The cost of borrowing a payroll cycle for a month is far lower than the cost of a large fixed payment you never needed.

Stress-testing a Washington payment

Check the weakest month.

Find your lowest-revenue month in the past year. Subtract costs and the proposed monthly-equivalent payment. If the result is negative, borrow less or choose a more flexible structure. Washington businesses with strong harvest, tourism or project cycles should do this before every draw. The guide on stress-testing payments has a simple format.

Coffee, restaurants and food trucks

Seattle's food scene produces many owner-operators.

Cafes, bakeries and food trucks buy equipment and absorb thin margins. A $35,000 truck upgrade or espresso bar rebuild has to pay back within a year or two to be worth financing. See food trucks and restaurant equipment for sector detail, and test the numbers with the equipment payback guide.

State and federal resources

The Washington State Department of Commerce and the SBA's Washington district office list programs.

Check both for current offerings. SBA loans can cost less for patient borrowers.

Apply

Quick and online.

Start at the application. The credit pull is soft.