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.
- 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
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;
- Click here for current rates and fees.
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.
- 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.
Entrepreneurial Lending Program: Application Process
- Applicants are advised to discuss their proposed project with VEDA Staff prior to submitting the application;
- Certain loans may be approved internally; other loans must be presented to the VEDA Board at their semi-monthly meetings;
- To complete the application, click here to download. If you can’t open this file, download the free Adobe PDF Reader.
- Applications may also be obtained at the VEDA offices in Montpelier, Burlington, and Middlebury.