The Newport News Capital Fund will lend up to $250,000 to finance new fixed asset investment located in Newport News.
The actual loan amount is determined (subject to the availability of funds and the approval of the Newport News Industrial Development Authority Board), through job creation and the amount of private sector match. Up to $30,000 of loan amount is available for each new job created ($35,000 per job in a Newport News Enterprise Zone).
The loan amount must be matched by at least $1 of private sector funding for every $1 of the loan amount. Private funding sources may be from equity and/or traditional lending institutions.
While real estate costs are eligible, the city prefers to fund machinery or equipment, since Federal Davis-Bacon requirements apply to any construction activity. Up to 25% of the loan proceeds can be used for working capital. Funds can also be used to assist in purchasing real estate.
The fund makes fixed interest loans at an interest rate of 4% below prime (but not lower than 4%). The maximum term of the loan is 20 years, or the useful life of the asset financed. Loans must be secured. The fund was capitalized by a grant from the U.S. Economic Development Administration and, therefore, financing is not available to companies relocating jobs from outside the Hampton Roads metropolitan area.