FAQ’s

Is this a grant or a loan from the VSBFA?  This is indeed a grant and does not require repayment.

How much will I receive in grant award?  Grants will be determined as the lower of 25% of the qualified investment or up to $50,000.

 

Is this the only year the grant has been awarded?  This grant has been awarded in previous years by the VSBFA.

Are there any annual or lifetime maximums of the awards?  Yes, there are lifetime and annual maximums.  The maximum lifetime award per qualified investor is $250,000, while the annual maximum award per qualified small business is $150,000.

Is there a window of time for this grant award?  Yes.  Awards are subject to availability of funds.  The award application process opens on March 18th and closes on March 22nd.  Bundais Enterprises will need your documentation the week ending March 15th to prepare for the application submission.  We will process applications in the order they were received.   

When do the cash investments have to be  given to the small business to be eligible for the grant? Cash investments in the form of equity or subordinated debt issued on or after July 1, 2021, and prior to January 1, 2024 are eligible.

An eligible investor is “an individual subject to Virginia State Tax pursuant to § 58.1-320….” What exactly does that mean and how do I know if I qualify?  An eligible investor for the SBIG grant is typically an individual living and working in Virginia.  To determine eligibility, the legislation references individual’s subject to Virginia income tax. You will qualify if you hold a Virginia Driver’s License and/or can produce documentation of paying Virginia state taxes within the last two years.

What is a special purpose entity established for the purpose of making investments for an individual?  

This is an entity or business formed to manage investments for an individual or a group.  A qualifying entity will be a Virginia established company where the member or members pay Virginia income tax on their share of profits.

What is considered an “equity investment”? 

An equity investment involves investing money or cash in exchange for a percentage of ownership in the company. The SBIG grant also accepts cash investments to be in the form of subordinated debt, which is a loan agreement between the business and investor.  The cash investment must remain in the business for operational purposes for two years and not paid back to the investor and the business must certify it will remain in business for two years.

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Does the purchase of a business qualify as an “equity investment” for the purposes of the grant? 

No.  Purchases/Acquisitions of an existing business of any kind are not considered eligible investments

How does debt become subordinated debt?  Subordinated debt refers to a type of loan that ranks lower in priority for repayment than other debt obligations in the event of bankruptcy or default. This means that in the hierarchy of creditors, subordinated debt holders are paid back only after senior debt holders have been repaid in full.

What are the rules on the SBIG for subordinated debt to be eligible? For subordinated debt to be eligible,  (i) principal payments cannot be made during the first 3 years after issuance; (ii) it cannot be guaranteed by any other person or secured by assets of the eligible business or any person; and (iii) must be subordinated to all bank indebtedness of the business.

 

Is a personal line of credit invested in the business eligible?  Yes.

What investments are not eligible Investments?  Investments are not eligible if the investor has been or will be allowed a Virginia Tax Credit pursuant to § 58.1-339.4.

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If i paid vendor bills and  rent or purchased items on behalf of the business and paid from my bank account to the vendors, does this payment on behalf of the business qualify as eligible investments?  No.  There are no exceptions provided for the eligibility requirements determined by legislation for this grant. Purchases and bill payments on behalf of the business are not eligible investments. Eligible investments must be cash from the investor bank account into the business bank account.

What is a sole proprietor?   A sole proprietor operates legally under his or her individual name (but can use a dba or other name) and operates using their social security number.  A sole proprietor is not considered an eligible business for the SBIG grant. However, a one member LLC works, which operates similarly to a sole proprietor but is registered under a tax identification number, is considered an eligible small business for the grant.

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If the business is new and has yet to file a tax return, what information would satisfy the tax return requirement? 

If the business was formed last year, a CPA prepared Profit & Loss statement may be submitted for review.

If I invested in multiple eligible small businesses, do I have to submit more than one assessment?

Yes, on the website you may complete multiple assessments for each of your small business investments. In addition, during the assessment process you can notify us if there are other small businesses in which you invested.

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What are the fees associated with Bundais Enterprises processing my application? 

We pride ourselves on transparency and efficiency in our fee structure, ensuring you receive the best service for your business needs.  We do not operate on a contingent basis and do not serve as a guarantor on the grant.    Our fee structure is designed to cover processing of your application efficiently.  Here's how it works:  Upon execution of the agreement, we require a retainer deposit of $500.  The remainder of our fee will be settled through an invoice.  The total fee amount will be notated on the agreement. 

I still have questions, is there somebody I can talk to?

Absolutely,  we have a dedicated team ready to assist you.  You may reach us by email at info.investorgrantva@bundais.com