New VEDA program supports Vermont’s forestry industry

Did you know? A new loan program from VEDA is now available to support businesses in the state’s forest economy.

Three million dollars in total financing can be provided in the form of loans up to $500,000 with subsidized interest rates for loggers, foresters, log haulers, biomass producers, sawmills, firewood producers and wood product manufacturers, for working capital, equipment and refinancing.

According to the Vermont Forest Futures Strategic Roadmap , the forest-based economy in the Green Mountain State accounts for about $2.1 billion annually and more than 13,800 jobs. The wood products industry has a rich history in Vermont’s economy and ecology alike — and it is a world known for high operating costs, variable markets and one heavily impacted by outside factors.

“Loggers, foresters and others in the wood products industry are dedicated to maintaining our state’s most beautiful renewable resource. But their day-to-day work remains at the mercy of Mother Nature, fluctuating markets and enormous operating expenses,” VEDA CEO Cassie Polhemus said.

VEDA, now in its 50th year, is tasked with furthering the state’s workforce, business development and public policy goals — something it continues to do through financing programs that help small business owners grow and create jobs.

Here’s what you need to know:

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% 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% 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% or more of the business.

To learn more visit: https://www.veda.org/financing-options/vermont-agricultural-financing/forestry

Read the story on VTDigger here: New VEDA program supports Vermont’s forestry industry .