Virginia Small Business Financing Authority Works with banks to help them provide loans to small businesses; Provides direct and indirect loans; Administers a grant program which provides grants to individual investors who are investing in small businesses.

Direct Loan Programs SWaM Business Micro-loan Maximum $10-25k 48 month repayment $100 fee, 6.50% fixed rate Any business purpose other than investment real estate Must have been operational at least 2 years Owners’ credit scores must be at least 650 each

Direct Loan Programs Economic Development Loan Maximum 40% of total project cost not to exceed $500K (dollar amount may be higher if project in designated distressed area) For real estate & improvements, furniture/fixtures/equipment, permanent working capital $500 application fee, recent fixed rate 4% Start up or existing business Focus on acceptable job creation/retention relative to loan amount

Direct Loan Programs Child Care Loan Maximum $150K per location for centers, $10K for home based providers 60 month repayment Borrower must be licensed & in good standing with VA Dept. of Social Services. Funds materials, equipment, supplies, playground, mini-buses, fencing $100 application fee, 4% max fixed rate

Bank Credit Support Programs Indirect Loans Bank underwrites/commits to loan subject to VSBFA involvement. Cash Collateral-VSBFA pledges cash collateral to the bank to help back a business loan Maximum $500k or 40% of the loan amount, whichever is less. Maximum involvement—5 years for term loans, 3 years for credit lines Cost $200 application fee Loan Guaranty-VSBFA provides an additional guaranty to the bank Maximum 75% of the loan amount or $750K, whichever is less Maximum involvement-7 years for term loans, 5 years for credit lines Cost $200 application fee, 1.5% of the guaranteed portion

How Should you Interact with the VSBFA How Should you Interact with the VSBFA? (if you need more than $25,000 or not licensed child care) Step #1: Talk to your banker Step #2: If the bank understands your request, believes your business can repay, but it feels it needs some help in approving the loan due to: Weak collateral value “Blip” in the historical financial performance Personal guarantees offered are not sufficient Perceived to be a “high risk” industry Lending against “specialized” equipment Etc. Step #3: Have your banker call the VSBFA We may be able to offer Cash Collateral, a Loan Guaranty, or participate as a subordinated lender to improve the bank’s loan to value or help your cash flow

Before you go see your Banker about a Loan, be prepared Have a Business plan (if you don’t have one, contact your local SBDC for assistance in developing one) Know your borrowing need Know why that amount is necessary & what you plan to do with it Know how you will pay it back and when Know how much you &/or your investors will be contributing Have the documentation to support all of the above Tax Returns – Business & Personal Financial Statements – Business & Personal AR aging, accounts payable, inventory turn time (if applicable) Financial Projections

Be Realistic & Be Able to Explain How Your Business will Repay the Loan

Cultivate a Relationship with your Banker The better your banker knows you and your business, the better your chances Build a relationship with your banker just like you would your CPA or your attorney But also…talk to more than one mutually beneficial relationship All VSBFA Programs Response time once VSBFA has received all required information: 1 week if VSBFA exposure is no more than $500K, approximately 1 month if VSBFA exposure exceeds $500K. Existing companies must have history of profitable operations & satisfactory debt payment. Start ups must have business plans & projections. VSBFA requires guarantees & pledge of all available business & personal collateral. Cash equity expected. VSBFA programs cannot be used to compensate for fundamental business weakness. No prepayment fees or closing costs aside from direct transaction costs. All real estate loans are “owner occupied commercial real estate.” No investment or residential. Limited ability to participate in business transfer loans financing goodwill.   WEBSITE: www.vabankers.org/VSBFA.aspx

Contact WEBSITE: www.vabankers.org/VSBFA Nathalia Artus, Regional Lending Manager 804 371 8208 nathalia.artus@sbsd.virginia.gov mutually beneficial relationship All VSBFA Programs Response time once VSBFA has received all required information: 1 week if VSBFA exposure is no more than $500K, approximately 1 month if VSBFA exposure exceeds $500K. Existing companies must have history of profitable operations & satisfactory debt payment. Start ups must have business plans & projections. VSBFA requires guarantees & pledge of all available business & personal collateral. Cash equity expected. VSBFA programs cannot be used to compensate for fundamental business weakness. No prepayment fees or closing costs aside from direct transaction costs. All real estate loans are “owner occupied commercial real estate.” No investment or residential. Limited ability to participate in business transfer loans financing goodwill.   WEBSITE: www.vabankers.org/VSBFA.aspx