FINANCE

A financial center, Virginia has two systems banks, a state bank, a savings bank, and 2 credit unions.  Deposits range from 11 to 715 million dollars per institution.

A full complement of financial services is available to commercial, retail, and industrial businesses from the lenders in Virginia.  Services include loans for commercial real estate, leasehold improvements, working capital, inventory or equipment.  Also available are cash management services, computerized payroll programs and investment counselors.

FINANCIAL INSTITUTIONS

TYPES OF ASSISTANCE AVAILABLE FOR BUSINESS DEVELOPMENT

BUSINESS ASSISTANCE

The Virginia Economic Development Authority promotes expansion in manufacturing and industrial sectors. They can also provided information on financial packaging, site location, management assistance and marketing.  The Virginia area Chamber of Commerce represents over 300 member business firms and provides a wide range of community service.  In addition, specific business assistance is available through the Iron Range Resources  (IRRRB), Arrowhead Regional Development Corp. (ARDC), Northeast Ventures Corporation, UMD, Arrowhead Community Economic Assistance Corp. and the Laurentian Community & Technical College District.

JobZ Minnesota Job Opportunity Building Zone

Under the Minnesota Job Opportunity Building Zones (JobZ) program, some 5000 acres across northeast Minnesota have been goven this special designation.  Beginning in January 2004, a wide variety of industrial sites and existing buildings in this area will offer growing and expanding businesses the opportunity to substantially benefit from tax exemptions for up to 12 years.  Tax exemptions for qualifying businesses include: corporate franchise taxes, income tax for operators or investors, sales tax on goods and services purchased, property tax on commercial and industrial improvements, wind energy tax, and employment tax credit for high paying jobs.  Virginia has 233 acres included in the JobZ sub-zones.

NORTHEAST MINNESOTA OFFICE OF JOB TRAINING

The Office of Job Training has held a long standing commitment to the economic development of businesses in this seven county Arrowhead Region.  For the past 12 years this office has worked with over 150 businesses providing services ranging from:
- Industry Specific Training
- Applicant referrals
- On-The-Job Training
- Mature Worker Program
- Internships

Areas of interest to Employers...
1.  Financial Reimbursements...to offset extraordinary costs related to training a new employee:
          A. Industry Specific Training...
         Employers that hire 3 or more workers within a 90 day
         period. The Office of Job Training can consider
         financial reimbursements for several cost
         areas:
         *   Training reimbursements for part of the new
         employee's salary and/or training allowances, if the
         employee is trained at a technical/community
         college, or at the worksite.
         B. On-The-Job Training...Employers that hire one
         or two new employees.
         *Training reimbursements for part of the employees
         salary, while the company provides the training to bring
         the employee up to company proficiency.

These programs can be considered if the individual meets the federal eligibility guidelines established under the Job Training Partnership Act.  A training agreement is signed with the employer and the Job Training office prior to the hiring or training of the new employee.  The wage of the new workers will have to be at least $7.00 or more per hour.  No payback requirement for any training resources provided by Job Training office.  The average allowance last year was $2000 per worker.

2.  A new program that can assist the employer and provide valuable work exposure to the individual.
          C. Internships...Employers allow individuals the
           opportunity to work at their business.
           *The individual gains hands-on work experience.
           *The Office of Job Training provides the intern with a
            wage and worker's compensation coverage.

3.  Applicant referrals:
     *The Office of Job Training works with individuals that are
       job ready:
     *Dislocated workers who have skills gained through
       education and work experience.
      *Graduates from technical programs
      (Technical/Community Colleges).
      *Individuals that have completed employment
       assessments and critical hard/soft skills training
       specifically designed to meet employer's needs.

WORK OPPORTUNITY TAX CREDIT

The Work Opportunity Tax Credit (WOTC) Program went into effect October 1, 1996.  WOTC provides employers a Federal income tax credit if they hire persons who are members of specified target groups.

In order for the employer to receive the tax credit the person who is a member of one of the target groups must be employed by that employer for 180 days or 400 hours.

The tax credit is equal to 35% of the first $6,000 in wages.  The maximum credit is $2,100.  In the case of the summer youth target group, the youth must be employed at least 20 days and the credit is limited to the first $3,000 in wages or a maximum of $1,050.

SBA 504 LOANS - CERTIFIED DEVELOPMENT COMPANY

The purpose of  the 504 Certified Development Company Program is to help communities stimulate the growth and expansion of small businesses within a defined area of operation.  The program provides long-term fixed asset financing for small businesses.  Proceeds may be used to finance plant construction, conversion of expansion, including the acquisition of land, existing buildings and leasehold improvements for an identifiable small business, and machinery and equipment with a minimum ten year economic life.

Financing for the 504 program is provided jointly by the Federal Government and the private sector.  Fifty percent (50%) of the project costs come from a private lender, forty percent (40%) are obtained by selling 100% SBA guaranteed debentures, and ten percent (10%) comes from the Certified Development Company and/or small business.  Maturities of 504 debentures are for ten or twenty year periods.  The useful life of the asset determines the term of the debenture.   The interest rate is set at the time of the debenture.

To be eligible, a business must be a for profit corporation, partnership or proprietorship.  With respect to size, the net worth of a business may not be in excess of $6 million and its net profit after taxes must have averaged less than $2 million during the previous two years.

NORTHLAND FOUNDATION

The purpose of the Northland Foundation is to mobilize and channel additional resources to the northland that can lead to greater self-sufficiency for communities, organizations, families and individuals.

In addition to grants to non-profit organizations, the Northland Foundation also has small business financing programs.

ARROWHEAD COMMUNITY ECONOMIC ASSISTANCE CORPORATION   (ACEAC)

Sponsored by the Arrowhead Economic Opportunity Agency (AEOA), ACEAC was established to aid in the development of the service area economy and to assist with revitalization and diversification efforts.

The primary work of ACEAC involves efforts that assist with the start-up and expansion of local businesses and industries, that increase employment opportunities and income levels, that retain existing jobs, and that identify and develop the local skills and talents that will help contribute to a healthy economy which provides economic opportunity for the unemployed, low income and minority citizens of the area.

The ACEAC can provide financial assistance for fixed assets, real property, inventory, and working capital.  Eligible recipients of assistance include:  Private For-Profit (individual or sole proprietorships, partnerships, corporations), Non-Profits, Cooperatives, Political Subdivisions, Reservation Business Committees.  Assistance amounts can range from as low as $500 to as high as $100,000.  Terms and conditions vary according to the individual project.

IRRRB BUSINESS LOAN PROGRAM

Loans are available through the Iron Range Resources   (IRRRB) at three percent below the current interest rate on treasury securities.  Businesses eligible for assistance under this program include resorts/tourism projects, technologically innovative industries, manufacturing and other industrial operations, and forestry and wood products industries.  Loans can be used for fixed assets, business expansion and facility improvements, working capital, limited refinancing and reasonable soft costs.  To be eligible for assistance under this program, your business must be located within the Primary Taconite Tax Relief Area.

          IRRRB Marketing Assistance
New and existing businesses in the Taconite Tax Relief Area may qualify for marketing research assistance grants.  This includes assistance with new product development, product distribution, transportation and marketing strategy, and sales and distribution assistance.

NORTHSPAN

The Northspan Group is a private economic development consulting firm.  The firm offers development services to business and industry, local government and other organizations.  Northspan offers management, marketing and technical assistance as well as various workshop seminars.  Financial assistance information and financial packaging are available in addition to assistance with community and business development strategies.

          Minnesota Marketplace
Minnesota Marketplace is a program of Northspan, and its purpose is to help strengthen Northeastern Minnesota's economy by reducing imports from outside the state and retaining more dollars in the regional economy.  They will match buyers in need of goods and services with local suppliers of those same goods and services.

          Arrowhead Business Connection
Another innovative Northspan program, Arrowhead Business Connection, works to develop Northeastern Minnesota's information-based sector industry.

VIRGINIA ECONOMIC DEVELOPMENT AUTHORITY
City Hall, 327 First Street South
Virginia, Minnesota 55792
TEL: 218-748-7535
FAX: 218-749-3585
email: veda@virginiamn.us

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© 2001 Virginia Economic Development Authority
most photos courtesy of Lauren Nelson