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calendar    Jun 03, 2024

Small Business Funding Programs In Vermont- 2024 Guide

Updated on June 2, 2024

Overview of Small Business Funding in Vermont

The state of Vermont offers a comprehensive range of funding options to support small businesses. These initiatives are aimed at fostering economic development through various forms of capital access and investment programs.

State Small Business Credit Initiative (SSBCI) The State Small Business Credit Initiative provides venture capital and loans to Vermont startups and small businesses. It is a federally funded program under the American Rescue Plan Act (ARPA) with $57.9 million allocated to the state.

Vermont Economic Development Authority (VEDA) The Vermont Economic Development Authority is instrumental in administering the SSBCI. VEDA offers diverse financing options such as the Vermont Small Business Loan Program, which can provide loans up to $500,000 for fixed asset acquisition or working capital.

Vermont Community Loan Fund The Vermont Community Loan Fund supports small businesses by providing loans up to $350,000. This fund has enabled multiple businesses to expand and open new retail locations, showcasing its pivotal role in economic growth.

The U.S. Small Business Administration (SBA) also operates in Vermont, aiding businesses through technical assistance and funding opportunities. The SBA's Vermont district office coordinates efforts to help small businesses across the state's 14 counties.

These initiatives reflect a concerted effort by the state and federal governments to bolster small business growth and economic stability in Vermont.

Vermont Economic Development Authority (VEDA)

VEDA, established in 1974, aims to bolster Vermont's economic vitality through diverse financing programs. These initiatives include various loan options, a venture capital program, and a specialized small business loan program tailored to meet the needs of Vermont's businesses.

Loan Programs

The Vermont Economic Development Authority offers numerous loan programs designed to support businesses across different sectors. These programs include the Loan Participation Program, which collaborates with other financial institutions to provide funding.

Additionally, VEDA's loans cater to both working capital needs and fixed asset acquisitions. Businesses can secure loans up to $500,000, making it a substantial resource for growing enterprises. The flexibility and variety in VEDA's loan offerings ensure that several business financing needs are met effectively.

Venture Capital Program

The Venture Capital Program managed by VEDA aims to provide investment capital to Vermont startups and expanding businesses. This program facilitates greater access to venture capital, enabling businesses that might struggle with traditional financing to secure necessary funds. As part of a partnership with the Department of Economic Development, this initiative supports entrepreneurial ventures.

By injecting capital, VEDA helps businesses scale operations, innovate, and generate employment. This program is crucial for fostering a robust startup ecosystem, drawing on $57.9 million in federal American Rescue Plan Act (ARPA) funding to enhance capital access.

Small Business Loan Program

VEDA’s Small Business Loan Program assists Vermont small businesses that find conventional financing inaccessible. Enterprises can receive loans up to $500,000 for various purposes, such as acquiring fixed assets or for working capital. This program is especially beneficial for businesses aiming to expand their operations, invest in new equipment, or increase inventory.

Eligibility criteria ensure that these resources go to businesses demonstrating strong potential for growth and sustainability. The Small Business Loan Program reflects VEDA's commitment to supporting local economic development by providing essential financial resources tailored to the unique needs of Vermont's small enterprises.

By offering these structured and accessible financial solutions, the Vermont Economic Development Authority enhances business growth and economic development across Vermont.

State Incentives and Tax Credits in Vermont

Vermont offers several state incentives and tax credits aimed at boosting economic development and providing financial support to small businesses. These programs include Tax Increment Financing, the Vermont Employment Growth Incentive, and Elevate Vermont, each with its unique benefits.

Tax Increment Financing (TIF)

Tax Increment Financing (TIF) is designed to spur economic development by allowing municipalities to use future property tax revenues from new development to fund improvements. These improvements may include infrastructure, community facilities, and other developments that promote economic growth.

TIF enables cities and towns to address underdeveloped areas and stimulate private investments. Unlike traditional financing methods, TIF does not rely on existing tax revenues but utilizes the increased property value generated by the new developments.

By enhancing public infrastructure, TIF projects can attract new businesses, create jobs, and improve the overall quality of life in the community. For more information on TIF in Vermont, visit the Agency of Commerce and Community Development's funding page.

Vermont Employment Growth Incentive (VEGI)

The Vermont Employment Growth Incentive (VEGI) provides cash payments to businesses that meet specific performance requirements related to job creation and capital investment. VEGI aims to encourage companies to expand in Vermont rather than elsewhere.

To qualify, businesses must create new high-paying jobs and generate significant economic activity. The incentive amount is determined based on the projected revenue return from the new jobs and investments.

VEGI is particularly beneficial for businesses looking to scale up operations, as it offers financial rewards that directly correlate with growth and performance. Detailed information is available on the ThinkVermont programs page.

Elevate Vermont

Elevate Vermont is an initiative focused on supporting small businesses through various grants, loans, and technical assistance programs. The program provides access to capital for startups and entrepreneurs to help them grow and innovate.

One key aspect of Elevate Vermont is its focus on equity and inclusion, ensuring that underrepresented businesses have the resources they need to succeed. This program aims to create a more diverse and resilient economy by offering targeted support to disadvantaged communities.

By providing financial and advisory support, Elevate Vermont helps businesses overcome barriers to entry and accelerates their growth potential. Additional details can be found on the State Small Business Credit Initiative page.

Grants and Funding Programs in Vermont

Vermont offers a variety of grants and funding programs to support small businesses, especially those aiming for growth, innovation, and sustainability. These opportunities range from training initiatives to specific aid under federal acts like the American Rescue Plan Act.

Vermont Training Program

The Vermont Training Program provides funding for customized training to upskill the workforce. This initiative supports businesses by covering expenses related to training employees, which can include both on-the-job and classroom instruction.

The program is designed to help businesses improve their competitive edge and maintain a robust workforce. Eligible employers can receive grants to cover up to 50% of the training costs, which is particularly beneficial for small businesses looking to enhance skill sets among their staff.

Vermont Small Business Development Center (VtSBDC) Assistance

The Vermont Small Business Development Center (VtSBDC) offers free, confidential assistance to small businesses. They provide counseling and training designed to help entrepreneurs achieve their business goals. Services include business planning, financial analysis, and market research.

VtSBDC also aids socially and economically disadvantaged individuals (SEDI) through tailored support. Entrepreneurs can access workshops, seminars, and one-on-one sessions to strengthen their business operations and strategies.

Working Lands Enterprise Initiative

The Working Lands Enterprise Initiative focuses on supporting agriculture and forestry enterprises in Vermont. This program provides grants for business investments, infrastructure, and technical assistance aimed at promoting innovation and sustainability.

Small businesses in the working lands sector can apply for funding to enhance production, processing, and marketing efforts. These grants help sustain Vermont’s rural economy by bolstering enterprises that rely on land-based resources.

American Rescue Plan Act Opportunities

Under the American Rescue Plan Act, Vermont has several funding opportunities aimed at recovery and revitalization post-pandemic. For instance, the state received $57.9 million for the State Small Business Credit Initiative, which improves access to venture capital and loans for startups and small businesses.

Additionally, the Community Recovery and Revitalization Grant Program allocates $40,000,000 for capital improvements that spur economic recovery. These funds are pivotal in helping businesses rebound from the economic impacts of the COVID-19 pandemic by providing necessary financial support.

Technical Assistance and Training in Vermont

Vermont offers a variety of programs designed to support small businesses through technical assistance and training. These services are essential for helping entrepreneurs navigate the complexities of business management and growth.

Vermont Small Business Development Center (VtSBDC) Advisory Services

The Vermont Small Business Development Center (VtSBDC) is a key provider of advisory services for small businesses in the state. They offer technical assistance across a range of areas including financial planning, marketing strategies, and operational improvements.

Business advisors at VtSBDC provide personalized one-on-one advising. This support is crucial for startup ventures and existing businesses looking to scale. Advisors help clients with business plan development and offer training workshops to improve specific skills.

Additionally, VtSBDC's role as the official Technical Assistance provider for the State Small Business Credit Initiative (SSBCI) means they have a direct impact on how federal funds are utilized to support business growth. Their comprehensive services are aimed at fostering a thriving small business ecosystem in Vermont.

Programs for Specialized Industries and Communities in Vermont

Vermont offers several funding programs designed to support distinct industries and communities. These programs target economic development, revitalization efforts, and expansion of trade opportunities, contributing significantly to local growth.

Northern Border Regional Commission (NBRC)

The Northern Border Regional Commission (NBRC) program aims to boost economic development and community projects in the northern regions of Vermont. The NBRC focuses on creating job opportunities, enhancing infrastructure, and improving the quality of life in economically distressed areas.

Specific industries such as tourism, workforce development, and renewable energy often benefit from NBRC grants. Local governments, non-profits, and businesses located in designated counties can apply for funding. The program encourages public-private partnerships and emphasizes projects that promise long-term economic impact.

Brownfields Revitalization Fund

The Brownfields Revitalization Fund supports the cleanup and redevelopment of contaminated sites throughout Vermont. These brownfields, often located in prime urban areas, can hinder economic growth if left undeveloped.

Grants and loans are available for assessment, cleanup, and remediation activities. This program specifically targets community and economic development projects, turning once-unused properties into productive spaces such as commercial buildings, housing, and public parks. This effort not only addresses environmental concerns but also revitalizes neighborhoods, attracting new businesses and investments.

State Trade Expansion Program (STEP)

The State Trade Expansion Program (STEP) helps Vermont small businesses expand into foreign markets. By providing financial assistance for export-related activities, STEP aims to increase the international sales of Vermont-made products and services.

Companies can receive support for activities such as trade show participation, market research, and export training. Emphasis is placed on reducing the costs and risks associated with entering global markets. This program is particularly beneficial for businesses looking to diversify their customer base and tap into new revenue streams, thus fostering overall economic growth in the state.

Access to Capital and Credit in Vermont

Business owners in Vermont can leverage several initiatives to gain access to capital and credit. Key programs include the State Small Business Credit Initiative (SSBCI) and various credit and investment programs designed to support both startups and established businesses.

State Small Business Credit Initiative (SSBCI)

The State Small Business Credit Initiative (SSBCI) is a federally administered program aimed at expanding access to capital for small businesses in Vermont. In 2022, Vermont received $57.9 million in federal funding under the American Rescue Plan Act (ARPA) specifically for SSBCI. Managed by the Vermont Economic Development Authority (VEDA) and supported by the Vermont Small Business Development Center (VtSBDC), the initiative provides access to venture capital and loans.

Technical assistance is also offered to help small businesses navigate the application process. This comprehensive support system is integral to ensuring that local businesses can secure the funding they need to thrive.

Learn more about the State Small Business Credit Initiative.

Credit and Investment Programs

The credit and investment programs under SSBCI provide a combination of direct credit support and private investment opportunities. These programs are designed to help existing small businesses and startups gain easier access to commercial loans. A key component is the Vermont Capital Access Program (VCAP), which utilizes a pooled reserve concept to facilitate commercial credit access.

Banks participate by signing a "Master Agreement" with VEDA, creating a Reserve Fund supported by premiums from participating businesses. This structure ensures that financial institutions have a safety net, encouraging them to lend more freely to small businesses.

Explore more about credit and investment programs.

Business Development and Expansion in Vermont

Vermont offers various initiatives and programs to support small businesses in their growth phases, focusing on market research, innovative growth, and funding.

Market Research and Development

Market research is essential for any business looking to expand. In Vermont, the Vermont Small Business Development Center (VtSBDC) provides valuable resources for conducting market analysis. VtSBDC helps businesses understand customer demographics, industry trends, and competitive landscapes.

Businesses can benefit from grant writing assistance offered by the Rural Economic Development Initiative (REDI). This initiative helps rural communities access funding necessary for market research and development, enhancing their ability to make informed decisions and plan effective marketing strategies.

The State Small Business Credit Initiative (SSBCI) also plays a vital role by providing financial support to businesses aiming to invest in market research. This initiative offers greater access to venture capital and loans, enabling businesses to gather data and insights essential for growth.

Innovative Growth Support

Supporting innovative growth is critical for start-ups and small businesses. The SSBCI program, benefiting from federal ARPA funding, allocates $57.9 million to provide loans and venture capital, aiding businesses in their expansion efforts.

The Vermont Economic Development Authority (VEDA) partners with SSBCI to make these funds accessible, promoting innovation and development. This partnership focuses on reducing project costs, making it easier for businesses to innovate and grow.

Another important program is the Community Recovery and Revitalization Grant Program. With a $40 million budget, this program supports projects that lead to economic recovery and community revitalization. Businesses can apply for grants to fund capital improvements, facilitating sustainable growth and innovation.

Support for Start-ups and Emerging Businesses in Vermont

Vermont offers a range of programs and initiatives aimed at supporting start-ups and emerging businesses. These include state-backed entrepreneurship programs and access to crucial seed funding and angel investment opportunities.

Entrepreneurship Programs

Vermont's commitment to nurturing start-ups is evident in its diverse entrepreneurship programs. The State Small Business Credit Initiative (SSBCI) provides both credit and investment programs, helping new businesses secure the financial backing they need.

Additionally, the ThinkVermont initiative simplifies the regulatory process for raising capital, encouraging local investment. These programs work in tandem with organizations like the Vermont Economic Development Authority (VEDA) to ensure that start-ups have access to the necessary resources and technical assistance. Such measures aim to foster a thriving entrepreneurial environment in the state.

Seed Funding and Angel Investment

Access to seed funding is crucial for the early stages of a start-up. The Vermont Small Business Offering Exemption facilitates raising up to $2 million in capital by selling shares to in-state investors, making it easier for startups to attract investment. Additionally, programs like the Vermont Community Loan Fund offer substantial loans, with caps reaching $350,000 for new ventures.

Organizations such as Community Capital of Vermont provide flexible financing options specifically tailored for women, low-to-moderate income entrepreneurs, and those with limited credit or collateral. This ecosystem of seed funding and angel investment ensures that emerging businesses have the financial support necessary for growth and sustainability.

Resources for Workforce and Employment in Vermont

Vermont offers several resources aimed at improving workforce skills and enhancing job retention. These include structured training programs and incentives designed to support employees and employers.

Employee Training and Skill Development

The Vermont Training Program (VTP) supports performance-based workforce training grants. These grants cover up to 50% of training costs for pre-employment, new hire, and incumbent employee training. Reimbursement occurs after the completion of employee training.

Since VTP’s inception over 30 years ago, Vermont businesses have benefited from improved employee skills, which can lead to higher productivity and better job retention. Employers looking to upgrade their workforce capabilities should consider this program.

Additionally, the Vermont Micro Business Development Program has been instrumental in launching and expanding businesses. By providing various training resources, it helps in developing essential skills for economic self-sufficiency and business growth.

Hiring and Retention Incentives

The Vermont Employment Growth Incentive (VEGI) is a key program that offers incentives for job creation and retention. It aims to attract and retain businesses by providing financial benefits for creating new, well-paying jobs in the state.

Businesses participating in VEGI can receive grants based on the quality and number of jobs created. This program plays a significant role in strengthening the local economy by encouraging long-term employment.

Furthermore, workforce development initiatives by the Vermont Department of Labor, such as the One-Stop Job Center, assist employers in finding and retaining qualified employees. The center provides comprehensive support, including job matching and education services, to boost employment rates and fulfill workforce needs.

Economic Recovery and Pandemic Assistance in Vermont

Vermont has developed several funding initiatives to aid economic recovery and assist businesses impacted by the COVID-19 pandemic. Two prominent programs include community revitalization efforts and COVID-19 specific aid for small businesses.

Community Recovery and Revitalization

The Community Recovery and Revitalization Program (CRRP) aims to bolster economic development throughout Vermont. Initiated through Act 183 and 185 in 2022, the program allocates $40,000,000 from the American Rescue Plan Act (ARPA) funds. The Agency of Commerce and Community Development administers these funds to support community projects that enhance local infrastructure, stimulate job growth, and promote sustainable development.

CRRP is essential for addressing the long-term recovery needs of Vermont communities. By providing financial support for critical projects, the program helps revitalize local economies and ensures that businesses can thrive post-pandemic. Eligible projects may include improvements to public spaces, upgrades to facilities, and initiatives that create new job opportunities.

COVID-19 Specific Aid

Vermont's COVID-19 specific aid programs provide targeted financial relief to businesses affected by the pandemic. The Economic Recovery Bridge Program, launched in June 2021, disburses $30 million to businesses experiencing revenue losses due to COVID-19. This program especially benefits businesses that faced eligibility constraints for previous state and federal funding.

Additionally, grants are available for small minority and women-owned businesses. These businesses, having zero to five employees and at least 51% ownership by minority or women stakeholders, can access funds to cover costs related to business interruptions. Programs like these ensure that vulnerable small businesses receive the necessary support to navigate pandemic-related challenges, thereby stabilizing the local economy.

Real Estate and Infrastructure Advancement in Vermont

Real estate and infrastructure development is essential for the growth and stability of small businesses. Vermont offers various funding options designed to assist businesses in acquiring, developing, and improving their physical assets.

Acquisition and Development of Land and Buildings

The Rural Industry and Development Program (RIDP) supports businesses by providing grant funding through local development corporations. This funding can be used for the purchase and development of land and buildings, which helps address the lack of industrial space in certain areas.

RIDP funds can also be allocated for the demolition of existing structures, enabling businesses to develop new facilities from the ground up. Additionally, this program aids in building new infrastructure essential for business operations and growth.

Another resource for business owners is the Vermont Economic Development Authority (VEDA), which offers loans specifically for the acquisition of fixed assets such as land and buildings. These opportunities make it feasible for small businesses to establish or expand their physical presence in Vermont's diverse economic landscape.

Improvements and Expansion Financing

Funding is also available for improvements and expansion of existing facilities. VEDA’s Small Business Loan Program offers loans up to $500,000 for working capital purposes, which can include infrastructure improvements and the acquisition of machinery necessary for expanding business operations.

Additionally, the State Small Business Credit Initiative (SSBCI) aims to provide greater access to venture capital and loans for small businesses. This program is particularly beneficial for startups and existing businesses looking to enhance their infrastructure or refinance existing debts to facilitate further expansion.

Sector-Specific Initiatives in Vermont

Various programs in Vermont focus on specific sectors such as agriculture and renewable energy, providing targeted support to enhance growth and sustainability.

Agricultural and Food Systems

The Vermont Agency of Agriculture supports small and very small businesses within the agricultural sector through a variety of funding programs and initiatives. These programs aim to foster innovation and sustainable practices in farming and food production.

Vermont Working Lands Enterprise Initiative provides grants and technical assistance to agricultural entrepreneurs. This helps businesses scale and improve their operations.

The Farm to Plate program connects farmers with markets and supports efforts to increase food security, emphasizing local produce.

Sustainable farming practices are a key focus, with programs encouraging organic farming, soil health improvement, and water conservation.

Renewable Energy and Sustainability

Renewable energy and sustainability initiatives are crucial for Vermont, aiming to reduce reliance on fossil fuels and promote environmentally friendly practices.

The Clean Energy Development Fund offers incentives for businesses investing in renewable energy projects such as solar, wind, and biomass technologies. This fund aids in reducing operating costs through energy efficiency.

The Vermont Sustainable Jobs Fund supports economic development through sustainable practices. Grants and loans are available for businesses transitioning to renewable energy sources.

Vermont's Renewable Energy Resource Center provides resources and support for energy projects, guiding businesses through the process of adopting renewable technologies. These programs help balance economic growth with environmental stewardship.

Funding and incentives from these initiatives are essential for fostering a greener and more resilient business environment in Vermont.

Business Transition and Ownership Change in Vermont

Transitioning a business in Vermont requires careful planning and consideration, with focus areas on succession strategies and employee ownership models to ensure continuity and stability.

Succession Planning

Succession planning is essential for maintaining the stability and profitability of family-owned and small businesses. It involves identifying and preparing the next generation of leaders to take over seamlessly. In Vermont, business owners can seek guidance from a business advisor to navigate this complex process.

Engaging in early planning allows for a smoother transition, minimizing disruptions to the local economy. Documenting roles and responsibilities clearly and training the successor are critical steps. Additionally, evaluating financial implications and potential tax liabilities can further safeguard the business's future.

Family-owned businesses may also consider alternative options, such as selling to a trusted partner or external buyer if no suitable family member is available. Leveraging expertise from organizations like the Vermont Small Business Development Center can provide valuable insights and resources.

Employee Ownership and Cooperatives

Employee ownership is an increasingly popular option as it promotes business continuity and loyalty. It encourages employees to invest in the success of their workplace, which can be beneficial for both the business and the local economy. The Vermont Employee Ownership Center supports such transitions.

Employee Stock Ownership Plans (ESOPs) are one method, allowing employees to obtain ownership through shares. This approach can enhance workplace morale and stabilize the business environment. Another model is the cooperative structure, where the business is collectively owned and democratically controlled by its workforce.

Resources and guidance from local organizations like the Vermont Small Business Development Center play a vital role in facilitating these transitions. Business advisors can help evaluate the best ownership model tailored to specific company needs, ensuring a robust transition strategy.

Frequently Asked Questions

Navigating small business funding in Vermont involves understanding available grants, loans, and eligibility criteria. Detailed information helps small businesses, including women entrepreneurs, secure necessary financial support.

What are the eligibility criteria for startup funding programs in Vermont?

Eligibility for startup funding in Vermont often includes being a registered small business within the state, demonstrating financial need, and having a solid business plan. Certain programs may also require businesses to be in specific industries or meet job creation targets.

How can small businesses in Vermont obtain free funding?

Small businesses in Vermont can obtain free funding through various grants and incentive programs. The State Small Business Credit Initiative provides federal funding to support startups and small businesses, making it easier to access venture capital and loans.

Which funding programs are considered the best for small businesses in Vermont?

Some of the best funding programs for small businesses in Vermont include the Community Recovery and Revitalization Grant Program and loans provided by the Vermont Community Loan Fund. These programs focus on economic recovery, capital improvements, and business expansions.

Where can women entrepreneurs find small business grants in Vermont?

Women entrepreneurs in Vermont can find business grants through state-funded programs and organizations like the Vermont Commission on Women and the VtSBDC. They also benefit from federal initiatives aimed at supporting women-owned businesses.

What options are available for small business loans in Vermont?

Vermont offers various loan options for small businesses, including the Vermont Community Loan Fund, which caps new borrower loans at $350,000. Additional loan programs are available through local banks, credit unions, and state economic development authorities.

What are the COVID-19 relief funding options for Vermont small businesses?

COVID-19 relief for Vermont small businesses includes the Community Recovery and Revitalization Grant Program, funded by the American Rescue Plan Act (ARPA). These programs aim to help businesses recover from the pandemic by providing financial assistance for capital improvements and economic revitalization initiatives.

This post is to be used for informational purposes only and does not constitute formal legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Resolve assumes no liability for actions taken in reliance upon the information contained herein.

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