Per the guidelines of this program, 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 this 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. 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 insurance expiration.
WVEDA normally 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 loan insurance application.
Upon receipt of the information, WVEDA prepares the application for its next available Board of Directors meeting. The WVEDA Board meets on the third Thursday of each month. Applications for Loan Insurance must be received by the first day of the month for consideration at that meeting.
If your lender is interested in pursuing the program, it can obtain a lender’s package by calling WVEDA.