Thereʼs a great opportunity for both West Virginia lending institutions and small businesses in need of capital. Small businesses in the Mountain State have a source of capital in the West Virginia Capital Access Program (WVCAP). This program is made possible through the State Small Business Credit Initiative (SSBCI), a component of the American Rescue Plan Act of 2021. The SSBCI provided $10 billion to state programs that support financing for small businesses by leveraging federal dollars along with private capital. The WVCAP program is designed to assist businesses that are creditworthy, but may not fit traditional lending models.
WVCAP is set to receive over $70 million that will be made available to qualifying West Virginia small businesses for a limited time. Approximately $40 million will be set aside for equity capital in support of seed stage and early stage businesses. The remainder is set aside for the Sub-Debt and Collateral Support programs. The program also contains a technical assistance component that provides funds to qualifying portfolio companies and other applicants for professional assistance in the areas of:
- business plan development
- financial modeling
- marketing and market research
- implementation of accounting systems
- product branding
- executive recruiting
When it comes to funding opportunities for startups and small businesses, the West Virginia Capital Access Program (WVCAP) stands out as a valuable resource. With a variety of funds designed to support entrepreneurship and economic growth in the state, WVCAP offers a range of financial assistance to help businesses thrive.
In this blog post, we will take a closer look at some of the key fund offerings provided by WVCAP, including the WVCAP Technical Assistance Fund, WVCAP Seed Capital Co-Investment Fund, WVCAP Subordinated Debt Fund, WVCAP Collateral Support Fund and the WVCAP Technical Assistance Fund.
WVCAP TECHNICAL ASSISTANCE FUND
The WVCAP Technical Assistance Fund provides technical assistance to WVCAP applicants and portfolio companies who demonstrate significant potential. Possible areas for assistance may include:
- Business plan development
- Financial modeling
- Market research and industry intelligence
- Product/branding techniques
- Design and implementation of cost accounting systems
WVCAP SEED CAPITAL CO-INVESTMENT FUND
The WVCAP Seed Capital Co-Investment Fund can provide funding of up to $2,000,000 to assist businesses in advancing intellectual capital, for market and with their working capital needs including expansion of their operations, technology development and key personnel hires. These transactions are either direct equity investments or convertible debentures with interest rates and terms based on market conditions and risk factors. The Seed Capital program has a 100% match, so every $1 of WVCAP funding is matched by $1 of non-WVCAP capital.
WVCAP SUBORDINATED DEBT FUND
If your business needs funding to purchase equipment, expand facilities or obtain permanent working capital, the WVCAP Subordinated Debt Fund may be the answer. The program will fund up to 50% of the borrower’s requirement, up to a maximum amount of $2,000,000. Interest rates are based on market conditions and other risk factors. The loan term can range between 1-5 years, subject to acceptable leverage ratio. Loan fees include a 1% commitment fee, based on the loan amount. The borrower also pays documentation fees. Loans are collateralized with business assets by filing a UCC – 1. Real estate loans are secured by deed of trust. All lien positions fully subordinate to senior lender.
WVCAP COLLATERAL SUPPORT FUND
In today’s cautious lending environment, your business may have some collateral, but lenders may be looking for a greater comfort level to extend credit. The WVCAP Collateral Support Fund can provide funding of up to 20% of loan amount with a maximum collateral support of $500,000. This program can augment your business’s existing collateral and give lenders more confidence to approve loan requests. Interest rates are competitive. Term of loan ranges between 1-5 years, subject to acceptable leverage ratio. Loan fees include a 2% origination fee. Loans can be collateralized with business assets by filing a UCC – 1. Real estate loans are secured by deed of trust. All lien positions fully subordinate to senior lender.
WVCAP TECHNICAL ASSISTANCE FUND
Operating Assistance Fund will provide technical assistance to WVCAP applicants and portfolio companies who demonstrate significant potential. Possible areas for assistance may include:
- Business plan development
- Financial modeling
- Market research and industry intelligence
- Product/branding techniques
- Strategic planning exercises
- Design and implementation of cost accounting systems
To learn more about getting funded or connected with one of the funds outlined before, contact us or reach out to the West Virginia Capital Access Program at [email protected].
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