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Virginia Small Business Financing Authority

Virginia Small Business Financing Authority. Works with banks to help them provide loans to small businesses; Provides direct and indirect loans; Administers a grant program which provides grants to individual investors who are investing in small businesses. Direct Loan Programs.

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Virginia Small Business Financing Authority

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  1. Virginia Small Business Financing Authority Works with banks to help them provide loans to small businesses; Provides direct and indirect loans; Administers a grant program which provides grants to individual investors who are investing in small businesses.

  2. Direct Loan Programs • SWaM Business Micro-loan • Maximum $10-25k • 48 month repayment • $100 fee, 6.50% fixed rate • Any business purpose other than investment real estate • Must have been operational at least 2 years • Owners’ credit scores must be at least 650 each

  3. Direct Loan Programs • Economic Development Loan • Maximum 40% of total project cost not to exceed $500K (dollar amount may be higher if project in designated distressed area) • For real estate & improvements, furniture/fixtures/equipment, permanent working capital • $500 application fee, recent fixed rate 4% • Start up or existing business • Focus on acceptable job creation/retention relative to loan amount

  4. Direct Loan Programs • Child Care Loan • Maximum $150K per location for centers, $10K for home based providers • 60 month repayment • Borrower must be licensed & in good standing with VA Dept. of Social Services. • Funds materials, equipment, supplies, playground, mini-buses, fencing • $100 application fee, 4% max fixed rate

  5. Bank Credit Support Programs Indirect Loans • Bank underwrites/commits to loan subject to VSBFA involvement. • Cash Collateral-VSBFA pledges cash collateral to the bank to help back a business loan • Maximum $500k or 40% of the loan amount, whichever is less. • Maximum involvement—5 years for term loans, 3 years for credit lines • Cost $200 application fee • Loan Guaranty-VSBFA provides an additional guaranty to the bank • Maximum 75% of the loan amount or $750K, whichever is less • Maximum involvement-7 years for term loans, 5 years for credit lines • Cost $200 application fee, 1.5% of the guaranteed portion

  6. How Should you Interact with the VSBFA? (if you need more than $25,000 or not licensed child care) Step #1: Talk to your banker Step #2: If the bank understands your request, believes your business can repay, but it feels it needs some help in approving the loan due to: Weak collateral value “Blip” in the historical financial performance Personal guarantees offered are not sufficient Perceived to be a “high risk” industry Lending against “specialized” equipment Etc. Step #3: Have your banker call the VSBFA We may be able to offer Cash Collateral, a Loan Guaranty, or participate as a subordinated lender to improve the bank’s loan to value or help your cash flow

  7. Have a Business plan (if you don’t have one, contact your local SBDC for assistance in developing one) Know your borrowing need Know why that amount is necessary & what you plan to do with it Know how you will pay it back and when Know how much you &/or your investors will be contributing Have the documentation to support all of the above Tax Returns – Business & Personal Financial Statements – Business & Personal AR aging, accounts payable, inventory turn time (if applicable) Financial Projections Before you go see your Banker about a Loan,be prepared

  8. Be Realistic & Be Able to Explain How Your Business will Repay the Loan

  9. Cultivate a Relationship with your Banker The better your banker knows you and your business, the better your chances Build a relationship with your banker just like you would your CPA or your attorney But also…talk to more than one

  10. Contact WEBSITE: www.vabankers.org/VSBFA Nathalia Artus, Regional Lending Manager 804 371 8208 nathalia.artus@sbsd.virginia.gov

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