Virginia Small Business Financing Authority

Virginia Small Business Financing Authority

Small Business Loan Guaranty Program

Through the Loan Guaranty Program, the Virginia Small Business Financing Authority (VSBFA) will guarantee a portion of a loan or line of credit extended by a commercial bank to a qualified Virginia business. With a guaranty from VSBFA, the bank benefits by reducing its risk in lending to the Virginia business, and the business benefits by accessing financing it would not otherwise have been able to obtain.

The maximum guaranty under the program is 75% of the loan or line of credit up to a maximum guaranty of $750,000. The program can be used to provide a guaranty for a short-term line of credit or a term loan of up to seven years in duration. An application fee of $200 must accompany the application package. If approved, a guaranty fee of 1.5% on the guaranteed portion is due at closing.

Applications for the Loan Guaranty Program are made by the bank requesting the guaranty. Unlike traditional government guaranty programs, the Loan Guaranty Program requires very limited paperwork and offers the bank great flexibility in loan structuring.

Child Care Center Financing Program

Through the Child Care Financing Program, VSBFA provides low-interest installment loans to "regulated" Providers in the Commonwealth of Virginia.  A "regulated" Family Home Provider must meet one of the following criteria: 

  1. Licensed by the Virginia Department of Education (VDOE) or operating under a local ordinance
  2. Registered through the Voluntary Registration Program
  3. Part of a Licensed Family Day Care System
  4. Participating in the Child Care Subsidy Program OR participating in the USDA Child and Adult Care Food Program

A "regulated" Center-based Provider must meet at least one of the following criteria: 

  1. Licensed by VDOE or Certified by VDOE (preschools only) 
  2. Filed as "religious-exempt" with the Virginia DSS. Both for-profit and non-profit entities are eligible to apply
  3. Participating in the Child Care Subsidy Program OR Participating in the USDA Child and Adult Care Food Program

Both for-profit and non-profit entities are eligible to apply. Start-ups are also eligible to apply.

How Loans Can Be Used

Loan proceeds can be used to meet or maintain childcare standards, including health, safety or fire codes or to make quality enhancements to their child care program. Loans may also be used for certain start-up costs; however, loans for building construction, working capital or to refinance or consolidate existing debt are not eligible under this program. Some examples of eligible uses include equipment purchases for infant care, playground equipment and fencing, educational materials, and children’s furniture. Financing buses for transporting children is an eligible use for a child care center. 

The maximum loan amount for Family Home Providers is $15,000 and the repayment term may be up to seven years.  Applicants must complete the Family Home Provider application and submit to VSBFA with all attachments for consideration.

The maximum loan amount for Center-based Providers is $150,000 and the repayment term may be up to seven years. However, up to $250,000 may be borrowed with a repayment term of up to 10 years.  Applicants must complete the Center-based Provider application and submit to VSBFA with all attachments for consideration.

Additional Information

For more information contact Karen White at karen.white@sbsd.virginia.gov or 804-371-8197, or if interested in any of the VSBFA programs visit the Virginia Small Business Financing Authority