Financial Programs


Virginia Small Business Financing Authority

The Virginia Small Business Financing Authority (VSBFA), which is housed within the Virginia Department of Business Assistance, offers programs to provide businesses and communities with access to capital needed for economic growth and expansion.

Industrial Development Bonds (IDBs).

The VSBFA issues both tax-exempt and taxable bonds to provide businesses and 501c3 corporations with access to long-term, fixed asset financing at favorable interest rates and terms. IDBs can be used to finance the acquisition and construction of land and buildings and for the purchase of other capital assets, including equipment. Eligible borrowers include new or expanding manufacturing companies, “exempt” facilities such as solidwaste disposal facilities and 501c3s. Through IDBs, creditworthy manufacturers and 501c3 corporations can finance up to 100 percent of the cost of acquiring, constructing and equipping a facility, including site preparation, at favorable interest rates. IDBs may also be used to allow manufacturers to lease facilities and equipment at tax-exempt rates. All projects financed with IDBs must meet federal tax code eligibility requirements. The maximum manufacturing project size is $10 million; 501c3 corporations and exempt projects are not subject to this limitation. Projects under $1 million are generally not cost-effective due to the initial transaction costs associated with bond financing.

Economic Development Loan Fund (EDLF).

The Virginia Economic Development Loan Fund facilitates capital investment in Virginia’s eligible communities by providing eligible borrowers direct loans which fill the “gap” financing need not met by equity or conventional financing. Community eligibility is determined based on guidelines set by the federal Economic Development Administration and are generally those with an unemployment rate one percent higher than the national average for the most recent 24-month period for which data is available, or that have a per capita income no greater than 80 percent of the national average based on the most recent data available. Eligible borrowers include local Industrial or Economic Development Authorities and businesses engaged in technology, biotechnology, tourism, engine and vehicle manufacturers for the professional motor sports industry, basic industries, manufacturing, and those businesses or entities that provide for a locality’s economic and “quality of life” development. Businesses that derived 15 percent or more of their revenues from defense-dependent activities and can demonstrate economic hardship related to defense downsizing may also apply. Eligible projects must provide some economic benefit to the community through job creation or retention or by enhancing a locality’s ability to attract private capital investment. A minimum hourly wage of $10.00 is required for jobs created. Additionally, businesses must meet the VSBFA definition of “small” business.* As the lender, the VSBFA can finance a maximum of 40 percent of a business project or $1 million, whichever is less. Generally, loans have 10-year maturities with amortizations based on the life of the asset or the borrower’s ability to repay. Rates are market-based and based on risk profile. Loans are secured by assets and personal guaranties.

Loan Guaranty Program.

The Loan Guaranty Program is designed to reduce a bank’s risk in making loans and, thereby, increase the availability of short-term capital for small businesses. The maximum guaranty under the program is 75 percent of the loan or line of credit up to a maximum guaranty of $500,000, and the guaranty is available for up to five years. Eligible businesses must meet the VSBFA definition of a “small” business.* Typical borrowings include lines of credit to finance accounts receivable and inventory, and term loans for permanent working capital and fixed asset purchases. Interested businesses apply to the bank for assistance. The bank applies to the VSBFA for the guaranty support. There is a 1.5 percent fee on the guaranteed portion of the loan.

New Markets Tax Credit Program (NMTC).

The Virginia Small Business Financing Authority’s New Markets Tax Credits Program is designed to help existing businesses fund the purchase of real estate occupied by their companies and/or capital equipment used in their operation. The Virginia Small Business Financing Authority serves as the conduit though which the Community Reinvestment Fund (CRF) makes New Markets Tax Credits (NMTC) loans available.

Questions? Contact us,

MCDED is here to help.

Support Programs


Montgomery County businesses can leverage a wide variety of programs that support their efforts to sustain and grow their business.

For more information, contact:
Montgomery County, VA
Economic Development Dept.
Call: (540) 382-5732
Email: info@yesmontgomeryva.org

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