13-002 Code Vt. R. 13-120-002-X

Current through August, 2024

Section 13 120 002 - VERMONT JOB START LOAN PROCEDURES

Amended VERMONT JOB START LOAN PROCEDURES

The Vermont Job Start Program is administered by the State Economic Opportunity Office (SEOO) in the Agency of Human Services, Waterbury, Vermont. Loan applications are available at the SEOO.

Address: State Economic Opportunity Office

103 South Main Street

Waterbury, Vermont 05676

Telephone: (802) 241-2450

Applications will be mailed on request.

Job Start loans are available to start, strengthen, or expand a small business. The maximum amount available is $ 10,000 for any single business proposal. Any individual's participation in Job Start funding shall not exceed $ 10,000 in that individual's lifetime.

Section I

To be eligible for a Job Start program loan, an applicant must:

1. Be a Vermont resident:

2. Be eighteen (18) years or older;

3. Have a gross annual household income of no more than seventy percent of the statewide median income for households of that size, as determined by the U.S. Department of Housing and Urban Development (HUD). The income eligibility guidelines shall be adjusted annually by SEOO on the first business day of the state fiscal year, using the most recent median income figures published by HUD.

a. Annual income is defined as gross income for the previous 12 months.

1) In the case of a partnership applying for Job Start funding, the gross annual household income of each partner must not exceed the income guideline in effect for that date, depending on size of household as above,

2) In the case of a cooperative or corporation applying for a Job Start loan, the gross annual household income of each shareholder must not exceed the income guideline in effect for that date, depending on size of houshold as above,

b. "Household" is defined as an individual living as an economically independent unit, or any group of individuals who are living together as an economically interdependent unit;

4. Have insufficient access to conventional sources of credit,

a. Insufficient access means - a lending institution in the applicant's area must have refused to approve a loan for the proposal submitted to Vermont Job Start, or

b. In the instance that the local lending institution approved the loan, the approval was made under conditions that would seriously jeopardize the proposal's success or the applicant's financial stability;

5. Have inadequate financial resources to undertake the proposal.

6. Notwithstanding the income guidelines set forth above, the SEOO director may, on a case-by-case basis, approve loans for applicants whose income exceeds the guidelines by no more than thirty percent, provided that the applicant is an eligible participant in the Job Start technical assistance program operated by a community action agency and funded by SEOO. All other eligibility requirements in this section must still be met in such cases.

Section II

The director of the State Economic Opportunity Office shall set the interest rate for Job Start loans as follows:

1. The interest rate may be adjusted within five business days of the first business day of each state fiscal quarter.

2. The interest rate shall not exceed a rate determined by adding the Federal prime rate in effect at the beginning of the first day of each fiscal quarter plus 2 1/2 percent points.

3. Any existing loan will not be affected by a future quarterly interest adjustment.

4. Job Start loans shall be at a fixed rate for the term of the loan.

5. Any loans made to existing borrowers for purposes of expansion or refinancing will be recomputed at the prevailing rate.

Section III

All applications are reviewed by the Vermont Job Start Program Specialist for the following criteria:

1. Does the applicant qualify under the eligibility requirements set forth above;

2. Is the business proposal feasible;

a. General reasonableness

b. Sufficient capital

c. Adequate market analysis

3. Creditworthiness of applicant;

4. Strength of the collateral offered to secure the loan.

Section IV

Applicants deemed ineligible because they fail to meet the criteria set forth in Section III above are notified immediately by letter that they are ineligible for a Job Start loan. If the Vermont Job Start Program Specialist finds the application meets the criteria in Section I, then a determination is made whether or not an application has sufficient merit under the criteria set forth in Section III, items 2-4 for additional processing. If it is determined that the proposal does not have sufficient merit, the applicant shall be notified by letter stating the reasons for denial. If the Program Specialist determines that an application has sufficient merit, the process shall be as follows:

1. The Job Start Program Specialist may contact the applicant for additional information about the business proposal, and prepare a loan proposal packet which is sent to one of the five Regional Advisory Boards:

Central Vermont Region

Lamoille County

Orange County

Washington County

Champlain Valley

Addison County

Chittenden County

Franklin County

Grand Isle County

Northeast Region

Orleans County

Caledonia County

Essex County

Southeast Region

Windsor County

Windham County

Southwest Region

Rutland County

Bennington County

2. The Job Start Program Specialist sets a meeting date for the Vermont Job Start Regional Advisory Board in the region wherein the applicant proposes to do business;

3. The applicant is notified of the meeting date and is asked to attend to present their proposal;

4. The Regional Advisory Board either approves or rejects the loan by a majority vote (in some instances, special conditions for receipt of a loan may be set by the board) and transmits the loan to the Director of SEOO for final approval or denial in accordance with guidelines set forth in these procedures;

5. If the loan is approved, the applicant is so notified and a date for closing is established by the State Economic Opportunity Office;

6. If the loan is denied, the applicant receives a letter stating the reasons for denial.

Section V

If an applicant wants to appeal the denial of their loan, they shall use the following procedure:

1. A written request for a hearing before the Human Services Board should be mailed to either the SEOO or the Human Services Board:

c/o Agency of Human Services

103 South Main Street

Waterbury, Vermont 05676

2. This request must be submitted within 30 days of the applicant's notification of denial;

3. The Human Services Board will schedule a hearing and notify the applicant of the date, place and time;

4. The applicant may be represented by counsel and call witnesses or represent themself.

Section VI Billing Procedures

1. The Job Start Program bills loan recipients on a periodic basis according to the terms of their promissory notes.

a. A payment is considered past due ten (10) days after the date on which it was due in the State Economic Opportunity Office;

b. A delinquency charge of 5% of the past due payment is assessed when all or any part of payment is more than ten (10) days past due.

13-002 Code Vt. R. 13-120-002-X

Effective Date: January 2, 1992 (SOS Rule Log # 91-78)