The WVEDA offers two Loan Insurance programs, the Commercial Loan Insurance program (CLINS) and the Broadband Infrastructure Loan Insurance program (BLINS).
Per the guidelines of the Commercial Loan Insurance program (CLINS), the WVEDA could insure up to 80% of a bank loan. The insured portion cannot exceed $500,000 and is for a maximum term of four years. Under the CLINS program, the applicant applies directly to the bank which negotiates collateral, interest rate and other loan terms in keeping with its own lending guidelines. Upon favorable review, the bank conditionally approves the loan and makes application to WVEDA for loan insurance. A non-refundable application fee of $500 payable to WVEDA must be submitted with the insurance application. The WVEDA will assess a 1% closing fee on the insured portion of the loan, due when the Bank loan closes. The $500 application fee will be credited toward the closing fee.
Loan proceeds may be used for fixed assets or other needs, such as inventory and working capital. However, construction loans and lines of credit do not qualify. The WVEDA insurance period is up to four years, the bank’s loan term can be longer however. A renewal or extension may be requested by the bank prior to CLINS expiration. The WVEDA requires a brief summary of the project, company history or business plan, company and personal financial statements, the bank’s conditional loan commitment and a one page CLINS application. Upon receipt of the information, the WVEDA prepares the CLINS application for its next available Board of Directors meeting. The WVEDA Board meets on the third Thursday of each month. Applications for CLINS must be received by the first day of the month for consideration at that months meeting. If your lender is interested in pursuing the program, they can obtain a lender’s package by calling the WVEDA.
The Broadband Loan Insurance Program (BLINS) was created to assist businesses in gaining access to credit from West Virginia's financial institutions. The objective of the BLINS program is to encourage lenders to undertake credit risk that will allow for the extension or expansion of broadband service to unserved or underserved areas of the State of West Virginia.
Per the guidelines adopted by the WVEDA the BLINS program could insure up to 80% of a bank loan for a broadband infrastructure or development project. The insured portion cannot exceed Ten Mllion Dollars ($10,000,000) and could be for a maximum term of twenty years. The project must be certified by the West Virginia Broadband Enhancement Council as having met the requirements of providing broadband service to an unserved or underserved area of the State of West Virginia. The project must have written certification from the participating financial institution that, but for the WVEDA BLINS program, the financial institution would not otherwise make the loan based solely on the creditworthiness of the broadband provider. BLINS applications originate with and are submitted by the financial institution. The WVEDA will not consider a BLINS application unless it is signed by the Lender. A nonrefundable application fee of $1,000 must be submitted to the WVEDA with the BLINS application. If the WVEDA approves the BLINS application, a closing fee equal to 2% of the Insured Portion of the bank loan will be due and payable to the WVEDA upon execution of the BLINS Agreement. If the BLINS application is approved the Bank will make the loan using its standard note, security agreements, deeds of trusts, etc. The Bank will set the loan fees and interest rates at its discretion, with disclosure to WVEDA. If the project is located on or secured by leased property, the term of the lease must be at least as long as the term of insurance.
If your lender is interested in pursuing the BLINS program, they can obtain a BLINS application by calling the WVEDA. Upon receipt of the BLINS application and supporting information, the WVEDA prepares the BLINS application for its next available Board of Directors meeting. The WVEDA Board meets on the third Thursday of each month. Applications for BLINS must be received by the first day of the month for consideration at that months meeting.