Financing for Vermont Businesses and Farms

Entrepreneurial Loan Program

VEDA recognizes that Vermont-based businesses in seed, start-up and growth stages are a vital source of innovation, employment, and economic growth in Vermont. This program provides financing to meet the working capital and capital-asset financing needs of Vermont-based businesses that may not have access to conventional means of financing.

Eligibility

  • Sole proprietorships, partnerships, corporations, LLC’s located in Vermont;
  • Businesses in seed, start-up or early growth stage who do not meet the underwriting criteria of other public and private entrepreneurial financing sources;
  • Businesses with innovative products or services that have the potential for long-term organic growth;
  • Businesses unable to access adequate capital because the primary assets used to secure loans are typically intellectual property or similar nontangible assets;
  • Businesses must demonstrate potential to create/retain employment opportunities for
    Vermonters.

Use of Proceeds

  • Purchase of capital assets and/or working capital; 
  • Refinance existing company debt in early stage companies in certain cases.

Loan Rates and Terms

  • Term of loan is based on assets being financed;
  • The Authority may collateralize its loans with mortgages on real estate and/or security interests in Project machinery and equipment, an assignment of customer contracts, and/or a security interest in the company’s proprietary technology. Flexibility with regard to collateral will be considered if adequate debt service cash flow coverage can be demonstrated;
  • Loans also will generally be guaranteed by any entity or individual who owns or controls 20% or more of the company;
  • VEDA may request an SBA guarantee at its discretion.

Special Consideration Will Be Given To:

  • Businesses that create jobs in strategic sectors, such as the knowledge-based economy,
    renewable energy, advanced manufacturing, wood products manufacturing, and value-added agriculture;
  • Businesses located in a designated downtown, village center, growth center, industrial park or other significant geographic location recognized by the State;
  • Businesses that adopt energy and thermal efficiency practices in their operations or otherwise operate in a way that reflects a commitment to green energy principles;
  • Businesses that will create jobs that pay a livable wage and significant benefits to employees.

Borrowing Parameters

  • VEDA may not fund more than ninety percent (90%) of the cost of the Project. Typically, the borrower will be required to provide the remaining ten percent (10%) of the total Project costs;
  • The amount of loan oustandings under the ELP program to any one borrower at any one time may not exceed $350,000;
  • Borrowers must maintain operations within the State of Vermont for a minimum of five years from the date the loan is funded, or borrower will be required to repay the loan in full.

Fees

  • $100 application fee;
  • 1.25% commitment fee ($250 minimum and $2,000 maximum);
  • $50 credit report fee;
  • Appraisal reimbursement (if applicable);
  • Document recording/discharge fees.

Entrepreneurial Lending Program: Application Process