VEDA recognizes that Vermont forestry and forest products-based businesses are a vital source of innovation, employment and economic growth in Vermont and have faced challenges related to unpredictable weather events and changing markets.
To help these businesses, VEDA created a special $# million loan program to offer loans up to $500,000 at a subsidized interest rate to meet the working capital and capital-asset financing needs of businesses in the forest products sector. The program is available for up to one year or when the allocated $3 million runs out.
Other forestry loans remain available through VEDA's regular agricultural and forestry loan program.
Eligibility
- Businesses in the forest economy, including foresters, loggers, log truckers, biomass producers, sawmills, firewood producers and wood product manufacturers
- Businesses (sole proprietorships, partnerships, corporations, LLC's) in good standing with all state agencies
- Loan proceeds must be used for projects located in Vermont and use forest products at least partially produced in Vermont.
Loan Purposes
- Purchase of capital assets such as vehicles, machinery & equipment, including but not limited to log trucks, excavators, feller bunchers and wood processors.
- Purchase of low impact logging equipment, machinery for implementing AMPs, and equipment, supplies and/or management costs that support soil and water conservation, such as flotation wheels/tires
- Pay operating expenses
- Support seasonal working capital needs
- Refinance existing debt at more affordable rates and/or terms.
Loan Rates and Terms
- Interest rates will be based on VEDA's fixed or variable Agricultural Loan Rates, as adjusted from time to time, minus 2 percent for the first five years of the loan. After the initial 5-year period, the rate will adjust to VEDA's prevailing variable rate.
- The term of loan is based on the useful life of assets being financed, typically up to 10 years for equipment and up to 5 years for working capital lines of credit.
- Consistent with conventional lending practices, loans will be secured by business and/or personal assets.
- The maximum loan size will be based on repayment ability, with the maximum not to exceed the lesser of 95 percent of the value of the assets securing the loan or $500,000.
- Loans will be guaranteed by any entity or individual who owns or controls 20 percent or more of the business.
Application Process
- Applicants are advised to discuss their loan needs with a VEDA lender prior to submitting the application. Please contact 802/828-5627 or [email protected].
- Applications may be downloaded or obtained from VEDA's office.
This story also appears on Forestry Equipment Guide.
