This article aims at providing new businessmen, who are on the verge of starting a new business, the necessary information about financing their business. Availing credit for business start-ups and their expansion has become far easier than it was a decade ago. People still use some conventional mode of financing but new ways are replacing the old ones almost regularly.
Further, the government has come to aid the business communities that do not qualify the conventional funding modes. Other than the regular commercial credit programs and credit cards that offer credit to the business owners, the government also offers specialized business credit programs. Such credit programs are targeted at economic growth through creation and retention of jobs in Vermont. Some of these programs are enlisted below:
Vermont Development Credit Union (VDCU)
VDCU is a non-profit, statewide, and federally insured financial organization that offers membership to all the residents of Vermont. The program targets at developing the economy and creating wealth for the middle and low-wealth business classes. VDCU is focused on striking such a financial balance by giving the above-mentioned classes of the financial industry access to affordable capital and other financial services at relatively low rates than the market.

VDCU provides a variety of services such as savings, money market accounts, loans for home improvement, home mortgages, CDs, IRAs, checking, and a range of small business loans.

Financial Access Program (FAP):
FAP in involved in creation of cash reserve funds so that the small businesses can access various ways of obtaining commercial credit. FAP, premiums based on a particular percentage of the entire loan amount are paid to the federal body of the local body by a participant lender. The government body then deposits the premium into the reserve account on the lender’s behalf. Both the lender and the borrower are required to contribute towards the premium. The bank may however pass a portion of this deposited amount into the borrower’s account.

Small Business Development Corporation (SBDC):
This program encourages businessmen earning low or moderate income to participate in the state’s economy by giving them funds for business expansion. Only those businessmen who are not eligible for conventional credit methods can apply for this program. Funds obtained from SBDC can constitute 50% of the entire project cost and the funding amount cannot exceed $50,000. The remaining portion of the project is funded though private equity or contributions from the participating lender.

Industrial Revenue Bonds (IRBs):
This program offers taxable or tax-exempt financing for businesses engaged in industrial and manufacturing operation. This act encourages various cities and countries to form non-profit organizations for industrial development by providing them authority to issue industrial revenue bonds. Basically, such bonds are approved by the government and the money is channeled to the business owners through non-profit industrial organizations.