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 Virginia.

Capital Access Program (CAP):
This program is designed for giving financial aid to businesses or non-profit organizations that are unable to obtain capital from other sources. Funds obtained through such a program can be used to finance a company’s working capital requirements, purchase or construction of a real estate property (not the company’s headquarter), and getting equipment on lease or purchase. Lenders are allowed to make riskier loan schemes that do may not qualify the normal lending requirements.

CAP necessitates contribution of a percentage to the lender’s reserve fund by the borrowers, lenders, and the government body itself. Factors such as loan make, interest rates, and terms of the loan agreement are decided by the lender.

Small Business Administration (SBA):
These programs are offered to manufacturing, service, technology, or agribusiness industries. Such companies must be into retailing and not into provision of personal or professional services to qualify for availing such a program.

Borrowers can use the loans obtained through this program to acquire land and buildings, buy or install equipment, utilize in working capital, or any other business-related expense approved by the federal government. These loans cannot however be used for refinancing or restructuring of bank loans and other debts.

Such a loan facility necessitates the business owner to create at least one permanent job within one year following the loan sanction. SBA department can fund the entire project cost and charges fixed interest cost during the tenor.

Enterprise Zone Program (EZP):
This program encourages local business communities in economically backward areas to enter into partnerships with Virginia. The objective of the program is development of the economy by way of expansion of the job market in the economically backward states.
To participate in this program, local communities or those in the state need to choose a particular company to make it their Enterprise Project. The government accepts the applications by such communities every quarter. The approved projects can apply for sales in the state and avail of tax refunds on all the qualified expenditures.