VEDA secures $1M loan fund for small business growth

Rural entrepreneurs will continue to have access to vital capital through the Vermont Economic Development Authority thanks to a $1 million loan from the U.S. Department of Agriculture. The loan from USDA’s Intermediary Relending Program will recapitalize VEDA’s Vermont Small Business Development Corp. to provide capital to growing Vermont businesses.

“Vermont’s rural businesses, from farms to manufacturers, depend on a mix of private and public capital like that provided by USDA to help them grow and create new jobs,” said Ted Brady, Vermont state director of USDA Rural Development. “Strong partners such as VEDA help us make a bridge between federal funding and investing in local entrepreneurs.”

VEDA CEO Jo Bradley said, “These funds help VEDA continue to make attractive financing available to Vermont’s small business community, demonstrating yet again the strong partnership between VEDA and USDA.”

USDA Rural Development has awarded VEDA a $1 million, 30 year, loan at a fixed interest rate of 1 percent. The Intermediary Lending Program provides capital to community development corporations that invest the money in small and emerging businesses within the communities they serve. VEDA will use the funds to lend to Vermont businesses that might otherwise struggle to gain access to adequate financing. VEDA estimates that this USDA loan will create 28 full-time jobs, retain 63 jobs, and assist sevennew businesses.

In January, Julianne Murat of the Vergennes Laundry used a $110,000 Vermont Small Business Development Corp. loan previously funded by the USDA as part of a financing package to  purchase the real estate that houses her bakery. Named for the old Vergennes Laundry that formerly occupied the space, the bakery uses a wood-fired brick oven to produce artisan bread and pastries. In addition to selling its products onsite, Vergennes Laundry is a regular at the Shelburne Farmer’s Market.  The USDA-supported funding helped secure the bakery’s location and six jobs in Vergennes.

This most recent addition to VEDA’s lending portfolio marks the 13th USDA loan to VEDA totaling $10.7 million since 1989. These funds have helped VEDA make 275 loans to small business owners and create or save more than 2,050 jobs across the state.

VEDA serves small businesses throughout Vermont.  Business loans must be supported by collateral and cash flow. VEDA currently sources the majority of its business lending funds by borrowing from private capital markets at variable interest rates. By accessing and blending the long-term, fixed rate USDA funding with its private capital, VEDA is able to offer loans at lower rates to Vermont businesses.  The VEDA-USDA relationship is a model of federal, state and private resources that works efficiently and supports a climate of business start-up and expansion in Vermont.