This means that 100% of the project cost is covered either by contribution of equity by the borrower, or
the senior or junior lien.
Proceeds from 504 loans must be used for fixed asset projects, such as purchase of land, including
existing buildings; cost of improvements; construction of new facilities or modernizing, renovating or
converting existing facilities and purchase of long-term machinery and equipment. Proceeds cannot
be used for working capital or inventory, consolidating or repaying debt, or refinancing or businesses
engaged in speculation or investment in rental real estate.
To be eligible for a CDC/504 loan, your business must be operated for profit and fall within the size
standards set by the SBA as small; that is, it does not have a tangible net worth in excess of $7.5 million
and does not have an average net income in excess of $2.5 million after taxes for the preceding two
years. Generally, your business must create or retain one job for every $65,000 provided by the SBA,
except for small manufacturers which have a $100,000 job creation or retention.
Generally, the project assets being financed are used as collateral. Personal guaranties of the principal
owners are also required. Interest rates on 504 loans are pegged to an increment above the current
market rate for 5-year and 10-year U.S. Treasury issues. Maturities of 10 and 20 years are available. Fees
total approximately 3 percent of the debenture and may be financed with the loan.
West Virginia’s 504 lenders are:
West Virginia Economic
Northgate Business Park
Charleston, WV 25311-1217
1310 Market St.
P.O. Box 1029
Wheeling, WV 26003
Business Finance Group
535 Winter Camp Trail
Hedgesville, WV 25427
All SBDC centers assist you and your lender in packaging such loans with T-Soft and Optimist 7 software.
US Department of Agriculture: Rural Development
The USDA Rural Development is dedicated to increasing the economic opportunity and improving
the quality of life for all rural Americans. To accomplish this, Rural Development coordinates Federal
assistance in rural areas of West Virginia.
Rural Development provides technical assistance and funding programs to rural Americans. Those
B&I Guaranteed Loan Program
A business located in a rural community may qualify for special financing. The U.S. Department of
Agriculture (USDA) currently maintains a Business and Industry (B&I) Guaranteed Loan Program,
with guarantees of up to 80 percent of a loan made by a commercial lender. Proceeds may be used for
working capital, machinery and equipment, buildings and real estate and certain types of debt refinancing.
B&I loans can be guaranteed in rural cities up to 50,000 population; priority is given to applications
for loans in rural communities of 25,000 or less. Loan proceeds can be used for business acquisitions;
construction; expansion; repair and development costs; purchase of equipment; machinery or supplies;
startup costs and working capital and refinancing for viable projects under certain conditions. Loan
guarantee limits are 80% up to $5 million, 70% over $5 million to $10 million and 60% over $10 million
to $25 million.
Like SBA loans, you need to go through your local bank or financial institution to apply for a B&I loan.
The Renewable Energy and Energy Efficiency Program
The Renewable Energy and Energy Efficiency Program, offers grants and guaranteed loans to help
farmers, ranchers, and rural small businesses purchase renewable energy systems and make energy
Farmers, ranchers, and rural small businesses with a demonstrated financial need are eligible for this
program. Farmers and ranchers must directly engage in the production of agricultural products and
obtain at least 50% of their gross income from their agriculture business.
Rural small businesses must meet the definition of a small business according to the SBA small size
standards and be headquartered in a rural area. The private entity may include a sole proprietorship,
partnership, corporation, and a cooperative.
Value-Added Producer Grants (VAPG)
Eligible applicants are independent producers, farmer and rancher cooperatives, agricultural producer
groups, and majority-controlled producer-based business ventures.
Grants may be used for planning activities and working capital for marketing value-added agricultural
products and for farm-based renewable energy. The maximum amount that can be awarded is $500,000,
and all VAPG funds must be matched by an equal amount of funds from the applicant or a third party.
Value-Added Products are defined as 1) changing the physical state or form of the agricultural
product; 2) physically segregating an agricultural product or commodity in a manner that results in
the enhancement of the value of the product or commodity; 3) producing an agricultural product or
commodity in a manner that enhances its value; or 4) using an agricultural product or commodity to
produce renewable energy on a farm or ranch.
1550 Earl Core Road, Suite 101
Morgantown, WV 26505
• Toll free: (800) 295-8228
The West Virginia Economic Development Authority (WVEDA) is the state’s mechanism for providing low
interest financing to new and existing business owners whose projects will benefit the state economically
through long-term job creation. The programs include direct and indirect loans.
Direct Loan Programs
The WVEDA can provide up to 45 percent in financing fixed assets by providing low-interest, direct loans
to expanding state businesses and firms locating in West Virginia. Loan term is generally 15 years for real
estate intensive projects and five to 10 years for equipment projects. Loan proceeds may be used for the
acquisition of land, buildings and equipment. Working capital loans and the refinancing of existing debt
are not eligible.
The loan insurance program provides funding through participating commercial banks to assist firms
that cannot obtain conventional bank financing. This program insures up to 80 percent of a bank loan
for a maximum loan term of four years. Loan proceeds may be used for any business purpose except the
refinancing of existing debt.
Industrial Revenue Bonds
This program provides for customized financing through federal tax-exempt industrial revenue bonds.
Of the state’s bond allocation, $57,492,750 is reserved for small manufacturing projects; $16,426,500 for
qualifying projects in Enterprise Communities, and $90,345,750 for exempt facility projects.
Linked Deposit Loan Program
The program allows small, for-profit state employers with 50 or fewer employees and gross annual
receipts of $5 million or less to apply for a linked deposit loan with an interest rate of 1 percent above
published New York Prime, up to $250,000.
In order to apply for a Linked Deposit Loan, you must work with your local SBDC business coach. For
contact information for your local office, call the Business Ask Me! Line toll free at (888) 982-7232 or find
you local office listing in Chapter 14: Using West Virginia’s Business Resources.
Because a participating lender must apply to the state on your behalf for the Loan Insurance, check with
your banker before considering either of these loans.
For information on any of these programs, contact:
||West Virginia Economic Development Authority
Northgate Business Park
160 Association Drive
Charleston, WV 25311-1217
Venture capital companies are certified investors who will contribute capital into a small business in
exchange for some level of control in the company and a return on their investment. This is not easy
money. Most venture capital companies are interested in projects requiring an investment of $150,000
to $200,000 or more, and expect a return of three to five times their original investment within five to
Before approaching a venture capital company, you should prepare a thorough business proposal that
supports the qualifications of your management team and have a strong and realistic financial plan.
While most venture capital funds will invest in any business, some funds are target certain geographic
areas or particular industries. Work with your SBDC business coach to select the right fund to approach.
Venture capital investment companies must be approved by the West Virginia Economic Development
Authority. The West Virginia Jobs Investment Trust is currently the most active venture capital fund
in West Virginia. For a complete list of other approved funds, contact the Authority; the information is
||West Virginia Jobs Investment Trust
Venture Capital Company
1012 Kanawha Boulevard, E., Fifth floor
Charleston, WV 25301
Additional Financing Programs
The Natural Capital Investment Fund (NCIF) is a business loan fund that provides debt and equity
financing to small businesses located in North Carolina, Northeast Tennessee, Southwest Virginia and
The NCIF provides flexible financing and investments and targeted technical assistance to a variety
of environmentally-related businesses, which range from small crafts enterprises and specialty food
manufacturers to multi-million dollar forest products enterprises. They also finance and invest in
businesses involved with Environmental & Green Products/Services.
Sectors of particular interest include: heritage and recreation-based tourism; value-added and
sustainable agriculture; water/wastewater treatment; sustainable forestry and forest products;
integrated waste management; and technology that promotes improved efficiency and safety in
For more information, contact:
||Natural Capital Investment Fund
Cell (304) 228-3121
Fax: (304) 870-2205
Local Financing Programs
Some local and regional development organizations offer financial assistance to small businesses,
particularly if the operation will result in job creation, retention or revitalization of the community.
Additionally, county and local governments may offer loan programs for business owners. Contact your
local Chamber of Commerce or government offices for information on the scope of services available in
The Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) programs are federal initiatives that provide over $1 billion in research and development grants
and contracts each year to small businesses to develop new products and services based on advanced
technologies. These programs provide excellent opportunities to nurture the development of innovative
businesses in West Virginia.
The SBDC serves as the centralized source for information and technical assistance regarding the SBIR/
STTR program for West Virginia-based small technology businesses and entrepreneurs.
In an effort to propel technologies, teams and companies that have a proven track record and a
technology or innovation with a high degree of potential, the SBDC has initiated an Award Matching
Program in conjunction with the federal SBIR and STTR efforts. If a West Virginia-based small business
has been successful at Phase I or Phase II the SBDC may be able to match a percentage of the award. To
learn more about this funding opportunity, visit click here.
The truth about federal grants: Right off the top — The U.S. government currently does not provide
grants for starting or expanding a small business. However, the government does offer plenty of free
help planning how to start or improve your business and in securing Small Business Administrationbacked
small business loans.
Most federal grants are awarded to organizations planning major projects of benefit to their community.
For example, a neighborhood street paving project; a statewide program to retrain displaced workers; or
a project to attract new businesses to a depressed downtown area.
Some state grants are available. To find out more, contact your local SBDC business coach and make an
appointment to review your eligibility.
The following are grants from two state organizations that assist small business owners.
The Division of Culture and History
The Division of Culture and History is home to the State Museum and Theater, the State Archives and
Collections, and a library for genealogical research. The Division includes the West Virginia Commission
on the Arts and the State Historic Preservation Office.
Through a long range planning process, the West Virginia Division of Culture and History (WVDCH), on
behalf of the West Virginia Commission on the Arts (WVCA), worked closely with artists, communities,
arts organizations and arts educators to identify arts needs of West Virginians. With direction from the
governor and the West Virginia Legislature, the WVCA has adopted a number of programs to address
The following table lists grant programs for individual artisans and crafters:
Professional Development. February 1. Up to 75% of project cost and up to 50% for subsequent
years. Provides support for professional and emerging artists seeking ways to expand and/or improve their
own work, or share their expertise. Helps art organizations better meet the need of under-served artists.
Training and Travel Fund. No later than 6 weeks prior to the event. Up to 50% of eligible expenses;
funds decrease for repeat visit to same event. Provides funding support on a reimbursement basis to
attend training opportunities.
There many other grants for arts organizations and educators. Call (304) 558-0220 or go to wvculture.org to see a complete listing and access online application forms.
Tourism Advertising Partnership Program (MAPP)
The Tourism Matching Advertising Partnership Program is a reimbursable partnership program that
provides matching funds for innovative and effective direct advertising projects that increase visitation
and travel expenditures in the State of West Virginia impacting the economic growth of the travel
There are various eligibility criteria and levels of awards. For complete information, definitions and forms,
call Tourism at (304) 558-2200, extension 59325 or go to wvtourism.com/MAPP.
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When a small business requests a loan, one of the first things a lender looks at is personal and business
credit history. So before you even start the process of preparing a loan request, you want to make sure
your credit is good.
Get your personal credit report from one of the credit bureaus, such as TransUnion, Equifax or
Experian or through a credit report service, such as annualcreditreport.com. You should initiate this step
well in advance of seeking a loan. Personal credit reports may contain errors or be out of date, and it
can take three to four weeks for errors to be corrected. It’s up to you to see that corrections are made,
so make sure you check regularly on progress. You want to make sure that when the lender pulls your
credit report, all the errors have been corrected and your history is up to date.
Once you obtain your credit report, check to make sure that all personal information (your name, Social
Security number and address) is correct. Then examine the rest of the report carefully. It contains a list
of all the credit you obtained in the past (for example, for credit cards, mortgages, student loans), with
information on how you paid that credit. Any item indicating that you have had a problem in paying will
be toward the top of the list. These are the credits that may affect your ability to obtain a loan.
If you have been late by a month on an occasional payment, this probably will not adversely affect
your credit. But it is likely that you will have difficulty in obtaining a loan if you are continuously late in
paying your credit, have a credit that was never paid, have a judgment against you, or have declared
bankruptcy in the last seven years.
A person may have a period of bad credit as a result of divorce, medical crisis, or some other significant
event. If you can show that your credit was good before and after this event and that you have tried to
pay back those debts incurred in the period of bad credit, you should be able to obtain a loan. It is best
if you write an explanation of your credit problems and how you have rectified them, and attach this to
your credit report in your loan package.
Also, work with your local Consumer Credit Counseling service to help repair and improve your credit.
Find your local office in the list below:
|1219 Ohio Avenue
109 East Main Street
Mt. Vernon Plaza
3985 Teays Valley
|699 Stratton Street
142 North Queen Street
1025 Main Street
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