Southside Region Tobacco Capital Access Program (TCAP)

The Virginia Tobacco Indemnification and Community Revitalization Commission (VTICRC) and the Virginia Small Business Financing Authority (VSBFA) have partnered to provide the Southside Region Tobacco Capital Access Program (TCAP) to banks for the benefit of businesses headquartered or operating in the Southside Tobacco Region.*  TCAP provides access to capital for qualifying businesses by encouraging banks to make loans that they would otherwise not make due to a borrowers riskier profile. Unlike government guaranty programs which provide a guaranty of a specific loan, TCAP utilizes an insurance concept on a portfolio of loans. TCAP establishes a loan loss reserve account at each participating bank which is funded by enrollment premiums paid by the Borrower/Bank and VSBFA. Because the participating bank determines what loans to enroll without VSBFAs involvement, TCAP is a flexible, non-bureaucratic tool to assist banks in meeting the financing needs of the Southside Tobacco Region businesses. In addition, as an incentive to enroll in TCAP, the VTICRC is offering a $50,000 Match Advance for a limited time.  (For banks wishing to participate in the program, please see the TCAP Program Manual and the TCAP Bank Participation Agreement.).

To apply for financing through TCAP, a business located in the Southside Tobacco Region makes application to a participating bank in Virginia.  (See the Participating Bank List for a current list of the banks participating in VSBFA programs.)

If the participating bank determines that the proposed financing request does not meet the banks normal underwriting guidelines, the bank will then determine whether the proposed loan transaction would be acceptable if the loan were enrolled in TCAP. The Virginia Small Business Financing Authority does not participate in the banks underwriting decision or the banks decision to utilize TCAP to provide financing.

Once the bank has approved the financing for enrollment in TCAP, the bank determines the premium amount to be paid by the borrower based on the banks perceived level of risk. Enrollment premiums are between 3% and 7% of the loan amount and are non-refundable. VSBFA contributes a matching premium, and in cases where the participating bank is new to the program, VSBFA's premium is twice that of the borrower's premium. Both the borrower's and VSBFA's premiums are contributed to a loan loss reserve account established for the benefit of the bank. In the event of a default on an enrolled loan, the bank can utilize funds in this reserve to offset its loss. Click here for a TCAP Fact Sheet in a printer friendly format.

*The borrower must be authorized to conduct business in the Southside Tobacco Region, defined as the counties of Amelia, Appomattox, Bedford, Brunswick, Buckingham, Campbell, Charlotte, Cumberland, Dinwiddie, Franklin, Greensville, Halifax, Henry, Lunenburg, Mecklenburg, Nottoway, Patrick, Pittsylvania, Prince Edward, Sussex, and cities of Bedford, Danville, Emporia, Martinsville; and the proceeds of the loan must be used for an endeavor related to industrial, commercial or other business enterprise within the Southside Tobacco Region.

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