Regional & Local Assistance
Virginia Coalfield Economic Development Authority (VCEDA) Financing
The Virginia Coalfield Economic Development Authority (VCEDA) provides low-interest loans to qualified new or expanding businesses through its financing program. The loans may be used for real estate purchases, construction or expansion of buildings, and the purchase of machinery and equipment. These loans are designed to enhance the economic base of Virginia’s e-Region, which comprises the seven counties and one city of southwestern Virginia: Buchanan, Dickenson, Lee, Russell, Scott, Tazewell, and Wise counties and the City of Norton. VCEDA also provides grants on a limited basis for projects that do not generate a sufficient revenue stream to repay a loan.
Eligible projects must:
- Locate within the Virginia Coalfield Economic Development Authority region.
- Be affiliated with a basic employer, meaning 51% or more of the facility’s revenue must be generated outside the Commonwealth (if employer is a private business).
- Pay an average wage of at least 150% of the federal minimum wage.
Priority will be given to loans requiring $10,000–$25,000 or less for each full-time basic job created, and to projects that create at least 15 new full-time jobs within 36 months of start-up.
Incentives and financing are subject to and based upon eligibility, location, due diligence, funds availability, application submittal, program requirements, and board approval.
- The company contacts the Virginia Coalfield Economic Development Authority to determine initial eligibility and obtain an application. Generally, a meeting to discuss the request with VCEDA staff is scheduled.
- A resolution of support for the application is generally required from the local industrial or economic development authority where the project will be located.
- The application is submitted to VCEDA, where it is reviewed and, if found in order, placed on the agenda for the next meeting of VCEDA’s Project Review Committee.
- The VCEDA Project Review Committee reviews the application and then makes a recommendation to the full VCEDA Board.
- The full VCEDA Board votes on whether to approve the application.
- If the application is approved, then the appropriate loan or grant documentation is prepared and a date scheduled for a loan or grant closing.
- Applications are due at least one month in advance of the VCEDA Board meeting at which they are to be considered.
- If the loan or grant agreement is not signed within 180 days of the loan or grant approval, then the loan or grant is canceled automatically. A request for an extension of this deadline may be submitted to the VCEDA Board for consideration.
Who may apply for VCEDA funds?
For-profit enterprises or entities, governmental or corporate instrumentalities in the coalfield region of Virginia, not-for-profit enterprises or entities, and industrial or economic development authorities located in the coalfield region. The coalfield region consists of Buchanan, Dickenson, Lee, Russell, Scott, Tazewell, and Wise counties and the City of Norton in southwestern Virginia.
What are eligible uses of VCEDA funds?
This is determined by the VCEDA Board as part of the approval process but, generally, VCEDA funds may be approved for the purchase of real estate; grading of sites; construction, rehabilitation, or expansion of buildings; purchase of machinery, tools, and equipment; and such other improvements, projects, activities, or purposes as the Authority deems necessary to accomplish its purpose.
What items are ineligible for VCEDA funds?
Generally, working capital, operating expenses, inventory, work in progress, and refinancing are not eligible. Projects that primarily involve the direct production of coal or natural gas are not eligible for funding from VCEDA. Support employment that primarily serves the local economy is ineligible. Except for infrastructure development and other limited purposes, projects that do not create full-time direct jobs are ineligible.
Is collateral required for loans?
VCEDA attempts to maximize collateralization of all loans. Ten years is the desired maximum term for a loan secured by real estate, and five years is the desired maximum term for a loan secured by equipment.
What is the interest rate for VCEDA loans?
Fifty percent of the prevailing prime rate at the time of application, for loans to or for the benefit of a for-profit enterprise or entity, unless determined otherwise by the VCEDA Board. Interest rates on all other loans shall be as determined by the VCEDA Board.
Is there a loan closing fee?
On loans to or for the benefit of a private enterprise or other non-governmental entity, a 1% loan closing fee is assessed at closing.
Does VCEDA have any grant programs?
Yes. VCEDA grants are generally limited to infrastructure improvements, workforce development and training, feasibility studies, and other similar type items that do not generate a sufficient revenue stream to repay a loan. VCEDA also operates several special-purpose funding programs through which it can provide grants, including the VCEDA Tourism Capital Improvement Matching Fund for tourism-related capital improvements, a Coalfield Regional Opportunity Fund, and the VCEDA Seed Capital Matching Fund. The seed capital fund is designed for small businesses no older than three years with less than 10 full-time employees; these businesses must be located or be locating in the VCEDA region.