Virginia Small Business Financing Authority Progams

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The Virginia Small Business Financing Authority (VSBFA) is the Commonwealth's economic development financing arm. We do not have grant programs. However, we provide debt financing assistance to …

The Virginia Small Business Financing Authority (VSBFA) is the Commonwealth's economic development financing arm. We do not have grant programs. However, we provide debt financing assistance to Virginia's established, existing businesses, its entrepreneurs, as well as businesses looking to expand into Virginia. The attached document outlines our programs and guidelines.

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  • 1. VIRGINIA SMALL BUSINESS FINANCING AUTHORITY PRIMARY FINANCING PROGRAMS Visit www.vdba.virginia.gov/financing_business for more detailed information ECONOMIC DEVELOPMENT LOAN GUARANTY CAPITAL ACCESS TAX-EXEMPT PRIVATE LOAN FUND PROGRAM PROGRAMS ACTIVITY BONDS WHO CAN APPLY? For profit businesses that meet the Private financial institutions Private financial institutions Manufacturing & qualifying Commonwealth’s definition of a small seeking to make loans to for seeking to make loans to for “exempt” facilities and 501 (c) 3 business; any 501 (c) 3 not-for-profit profit businesses that meet the profit businesses that meet the not-for-profits that meet the entity; and any local Industrial or Commonwealth’s definition of a Commonwealth’s definition of a federal code requirements for Economic Development Authority. small business and any 501 (c) 3 small business and any 501 (c) 3 eligibility. not-for-profit entity. not-for-profit entity. LOAN PURPOSE Fixed assets & some permanent Short-term & permanent working Short-term & permanent working Acquisition & construction of working capital. capital; fixed assets; & capital; fixed assets; & land & buildings; leasehold restructured debt benefitting the restructured debt benefitting the improvements; purchase of borrower. borrower. equipment, furniture, fixtures. VSBFA Up to 40% of the project or Deficiency guaranty up to 85% VSBFA provides a match of the VSBFA acts in the capacity of PARTICIPATION $1,000,000, whichever is less. of the loan or $750,000, borrower’s enrollment fee to conduit issuer, determining the Minimum loan size is $50,000. whichever is less. build a loan loss reserve pool for public benefit of the use of tax- Maximum loan size for “non- the financial institution. exempt financing. distressed” areas is $500,000. MAXIMUM LOAN None None None None AMOUNT Maximum enrolled loan amount 100% project financing allowed. is $250,000. MATURITY Up to 10 years, loan may be Up to 5 years, loan may be Up to 10 years, loan may be Average maturity of the bonds amortized for longer term. amortized for longer term. amortized for longer term. can be up to 120% of the economic life of the assets being financed. VSBFA Fixed base rate is tied to “like The financial institution sets the The financial institution sets the N/A INTEREST RATES treasuries” with a risk-based spread. rate, no minimum or maximum rate, no minimum or maximum requirement. requirement. VSBFA FEES $500 application fee. $200 application fee and a one- Between 3 – 7%, one-time $1000 application fee and an time 1.5% guaranty fee (annual enrollment fee (bank sets the annual fee of 1/8th of 1% of the on lines of credit). fee). outstanding principal amount of the bond. (1/10th of 1%, with a cap of $125,000 annually for 501 (c) 3’s). RESTRICTIONS Cannot be used to: subsidize a Cannot be used to: Cannot be used to: All interested parties should business that can obtain financing at eliminate the financial finance residential real estate or discuss transactions with reasonable terms from conventional institution’s requirement for passive real estate investment. competent bond counsel prior to lenders without VSBFA help; collateral or the principal’s All other legal business purposes submitting applications. refinance a bank’s existing debt; personal guaranty; compensate are allowed. relocate a business from one for a fundamental business geographical area to another; weakness; restructure debt if the compensate for a fundamental borrower DOES NOT have a business weakness; provide short-term prior history of profitable working capital. operations and paying credit as agreed. Virginia Small Business Financing Authority • 866-248-8814 or 804-371-8254 • www.vdba.virginia.gov