RICHMOND, Va. (WRIC) — The state agency tasked with administering two new COVID relief grant programs has fallen short in helping small businesses in Virginia obtain funding, according to a report released Monday by the General Assembly’s audit commission.
The Joint Legislative Audit and Review Commission’s report found that the Virginia Small Business Financing Authority has not met “key criteria for effectiveness,” only disbursing a small portion of available funds for grants and loans to businesses over the last three years.
The VSBFA is responsible for two programs, the Rebuild VA grant program and a COVID loan program, developed to help those affected by the coronavirus pandemic. The Rebuild VA grant program was created to provide nearly $71 million to businesses “in non-essential industries.”
In the 2020 fiscal year, the VSBFA left 76 percent of the $33 million available unused. The year before, the authority only disbursed 10 percent of the $31.1 million available.
“VSBFA also lacks written policies on risk standards for loans and a standardized tool for staff to assess applicants’ repayment risk. Without policies and a tool to govern loan decisions, VSBFA has tended toward caution and generally been too conservative when making loan decisions,” the report states. “This is inconsistent with the authority’s mission to provide gap financing to businesses who may not be eligible for private bank loans.”
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