Vermont Loan Participation Program

The Vermont Loan Participation Program provides expanded access to capital for small businesses, not-for-profit organizations, and agricultural enterprises emerging from the pandemic, building ecosystems of opportunity and entrepreneurship, and creating high-quality jobs. It is funded with $29 million from the State Small Business Credit Initiative (SSBCI) run by the U.S. Treasury. VEDA is using that SSBCI funding to enhance its commercial, agricultural and forestry, and energy lending programs and will continue to work with lending partners, often in a subordinate position, to provide financing necessary to meet the borrower’s needs. These are loans, not grants, and must be repaid under standard repayment terms, however the SSBCI funding may allow lower initial interest rate or lower required borrower contribution in an SSBCI eligible transaction.

SSBCI eligibility includes:

• Total project financing is less than $20 million.
• The borrower has fewer than 750 employees worldwide.
• The loan is for business purposes.
• The loan is not for passive real estate investment. (Note: SSBCI allows owner-occupants to lease to non-owner tenants up to 49% for existing buildings and up to 40% for new construction projects.)
• Other funding for the same purpose cannot include loans guaranteed by SBA or USDA-RD, or an SBA 504 loan. (Note: borrower can have SSBCI and SBA/USDA-RD loans for different purposes. For example, SSBCI for real estate and an SBA equipment loan.)
• Refinancing is allowed if 1) the refinanced loan or other debt is 150% or more of the previous loan balance and 2) the loan proceeds will not be used to finance an extraordinary dividend or distribution.

Loans for speculative activities, gambling, pyramid sales, and activities prohibited by the federal or state law are not eligible.

For more information on VEDA loan products contact a VEDA lender at VEDA.org - Contact Us.

State Small Business Credit Initiative (SSBCI)

The state of Vermont received $57.9 million in SSBCI money from the federal government to expand access to capital for small businesses, nonprofit organizations, and agricultural enterprises. The state tasked VEDA with deploying these funds. VEDA used half of the money to fund the Vermont Loan Participation Program. The other half was used to create the Vermont Venture Capital Program.