VCEDA Incentive and Financing Programs
The Virginia Coalfield Economic Development Authority (VCEDA) is a unique regional economic development organization created by the Virginia General Assembly in 1988. It receives funding derived from a portion of the taxes paid by the coal and natural gas industries in the region to operate incentive financing programs designed to help enhance and diversify the economy of Southwest Virginia’s e-Region and create jobs. The region includes the Virginia counties of Buchanan, Dickenson, Lee, Russell, Scott, Tazewell, and Wise, and the City of Norton.
VCEDA currently operates the following incentive financing programs: the VCEDA Coalfield Economic Development Fund, the VCEDA Tourism Capital Improvement Matching Fund, the VCEDA Seed Capital Matching Fund, the VCEDA Coalfield Revolving Loan Fund, the VCEDA Workforce Development and Training Fund, the VCEDA Communities for Opportunity Loan Fund, and the VCEDA Civil Penalties Fund.
Coalfield Economic Development Fund
VCEDA’s primary financing program is the Coalfield Economic Development Fund, which is primarily a revolving loan fund designed to provide low-interest loans for fixed asset needs (e.g., land purchase, building construction, equipment). Financing is based in part upon the number of new jobs created, amount of private investment, and wage rates. An average wage of at least 1.5 times federal minimum wage is required. Priority will be given to projects requiring $10,000-$25,000 for each new job created, and projects that create at least 15 full-time jobs within 36 months. The project must provide at least 20% equity. A limited amount of funding from the Coalfield Economic Development Fund is also provided on a loan or grant basis to assist local industrial/economic development authorities in the region with the development of industrial parks, business parks, and technology parks, and to assist with infrastructure for these industrial parks. Funding available from the Coalfield Economic Development Fund varies by locality, based upon the amount of coal and natural gas severance taxes paid in that locality.
Tourism Capital Improvement Matching Fund
The VCEDA Tourism Capital Improvement Matching Fund is a loan and grant program designed to assist with the development of tourism-related capital improvements that are part of larger regional tourism initiatives that will enhance the region’s economy. Generally, public and non-profit organizations are eligible to apply for loan or grant funding from this program. For-profit entities may only apply for loans from this program. A dollar for dollar match is required, and no applicant may be approved for more than $150,000 in a fiscal year. Available funding for this program is based upon annual appropriation by the VCEDA Board.
VCEDA Seed Capital Matching Fund
Helping entrepreneurs to grow their new small businesses is the purpose of the VCEDA Seed Capital Matching Fund. Under this very successful program, for-profit businesses that are no older than one year and have less than 10 full-time employees, may apply for up to a $10,000 grant. A dollar for dollar match is required, and the new business must be located in the region. The business must also plan to create or retain at least one full-time job within a year. To begin the application process for this program, applicants should contact the Small Business Development Center at either Southwest Virginia or Mountain Empire Community College. A letter of support for the funding request is also generally required from the local industrial/economic development authority of the locality in which the project is located.
Available funding for this program is based upon annual appropriation by the VCEDA Board.
Coalfield Revolving Loan Fund
The VCEDA Coalfield Revolving Loan Fund is a more recent revolving loan fund program established to promote the economic diversification of Southwest Virginia’s e-Region and made possible by revenue generated from the Coalfield Employment Enhancement Tax Credit. Unlike the Coalfield Economic Development Fund, which may vary depending on the amount of local coal and natural gas severance taxes paid in the particular locality, the VCEDA Coalfield Revolving Loan Fund provides a region-wide fund that provides low-interest loans for projects that will help the region’s economic and workforce development.
Workforce Development and Training Fund
Related to the VCEDA Coalfield Revolving Loan Fund is the VCEDA Workforce Development and Training Fund, which also is funded from the Coalfield Employment Enhancement Tax Credit and provides a source of loan and grant funds for workforce development and training in Southwest Virginia’s e-Region.
Other Funding Programs
Other programs operated by VCEDA include the VCEDA Communities for Opportunity Loan Fund, which primarily has been used to assist with hotel projects in the region, and the VCEDA Civil Penalties Fund, which is a specific program established by the General Assembly to provide funds to assist the Breaks Interstate Park, one of only two interstate parks in the United States.
All incentives and financing are subject to and based upon eligibility, location, due diligence, funds availability, application and program requirements, and board approvals. A letter of support for the funding request is also generally required from the local industrial/economic development authority of the locality in which the project is located.
All VCEDA loans and grants require the approval of the VCEDA Project Review Committee and the VCEDA Board of Directors, both of which typically meet every other month. The application deadline generally is one month in advance of the board meeting at which the request is to be considered, except for the VCEDA Seed Capital Matching Fund which typically has a spring and fall application deadline.
For further information on other incentive and financing programs, Click Here.
- Low interest rate loans
- For fixed asset needs such as the purchase of real estate, grading of sites, building construction or expansion,
and the purchase of equipment, machinery, and tools
- Working capital, operating expenses, inventory, and refinancing are not eligible
- Collateral is required on all loans
- Twenty percent equity required
- Maximum loan term of 10 years on real estate loans and 5 years on equipment loans is desired
- Seed Capital Matching Fund for businesses no older than one year and under 10 full-time employees