Virginia’s new economic development package makes it possible for cash-starved small businesses to increase availability of capital to small businesses. The increase of credit shall be done by means of loan guarantees and other measures. The Virginia Small Business Financing Authority (VSBFA) will make the financing available from July 1st. The authority guarantees 85 percent of an applicant’s bank loan up-to $750,000. Participating banks will be instrumental for the financing.
Virginia is seeking $17 million from U.S. Treasury Department for use by the authority. Treasury has granted $1.5 billion to states for strengthening small business lending programs. None of these programs are designed for converting bad loans into good ones.
The VSBFA programs have stimulated interest among banks in the state. Some have even stepped up to make commercial and industrial loans. Veteran bankers, however, made it clear that small business bankers must be prepared to personally guarantee company loans and should be in a position to provide detailed information that includes personal tax returns. Borrowers also need to demonstrate that they have enough expertise, equity and collateral to find credit from a bank.
Cash flow is very important when it comes to evaluation of a loan application. Business owners need to compile a detailed plan that summarily describes customers, loan collateral, competition and company management.
This article was submitted by Raj Tulshan, Director of Business Development of Biz2Credit. Biz2Credit is a small business marketplace that connects entrepreneurs with financing options and advice to grow their business. Send all questions to