VA: Virginia Small Business Financing Authority (VSBFA)
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Virginia Small Business Financing Authority (VSBFA) | Virginia Economic Development Partnership Skip to main content The Virginia Small Business Financing Authority (VSBFA) is the Commonwealth of Virginia’s business and economic development financing arm. VSBFA provides businesses and localities with debt financing resources for economic development projects and other small business and entrepreneurial financing needs. VSBFA’s definition of “small business” is $10 million or less in annual revenues over each of the last three years, or a gross net worth less than $2 million; or 250 employees or fewer in Virginia; or qualification as a 501(c)(3) nonprofit entity. For more information, please refer directly to VSBFA . Contact Ray Sanchez Virginia Small Business Financing Authority 804.371.8228 ray.sanchez [at] sbsd.virginia.gov Eligibility and Program Overviews Private Activity Bonds (PABs) VSBFA issues tax-exempt and taxable bonds to provide qualifying businesses and 501(c)(3) entities with access to long-term, fixed-asset financing at favorable interest rates and terms. Industrial Development Bonds (IBDs) can fund land acquisition, building construction, and capital asset (equipment) purchases. Eligible borrowers include new or expanding manufacturing companies, “exempt” facilities such as solid waste disposal facilities, and 501(c)(3) entities. Through IDBs, creditworthy manufacturers and 501(c)(3) entities can borrow up to 100% of the cost of acquiring, constructing, and equipping a facility, including site preparation. IDBs may also facilitate tax-exempt funding for leased manufacturing facilities and equipment. All projects financed with IDBs must meet the federal tax code’s eligibility requirements. The maximum manufacturing project size is $20 million; 501(c)(3) entities and exempt facility projects are not subject to this dollar limitation. At current interest rates, unless a bank will be directly providing the financing, projects under $3 million are generally not cost-effective due to the transaction costs of bond financing. Economic Development Loan Fund (EDLF) The EDLF offers permanent working capital, owner-occupied commercial real estate, and equipment loans to fill the financing gap between private debt financing and private equity. Project eligibility is determined by guidelines set by the federal Economic Development Administration (EDA) and the VSBFA. Eligible borrowers include local industrial or economic development authorities and businesses engaged in technology, biotechnology, tourism, manufacturing, renewable energy, government contracting, and those businesses or entities that provide an enhanced “quality of life” in a locality or region. Eligible projects must provide economic benefit to the community through job creation/retention (minimum $10.00 hourly wage) or by enhancing a locality’s ability to attract private capital investment. The maximum loan amount is generally the lesser of 40% of the total project cost or $1,0