Lancaster EDA advances plan for multi-tiered grant suite and revolving loan fund, subcommittee to draft details

The Lancaster County Economic Development Authority on April 16 reviewed a proposal to replace its single-track grant program with a multi-tiered suite of grants and a revolving loan fund aimed at supporting businesses across the life cycle.

John Baitman, who presented the plan, told the board the proposal includes micro-start grants (0–3 years, up to $2,500), acceleration grants (3–10 years, up to $5,000) and a separate pool for larger capital investments to be funded through a revolving loan program. “We’re trying to create a revolving loan fund that is sustainable over time,” Baitman said.

The board heard that the Lancaster board of supervisors has agreed in principle to transfer the remaining Poor House tract funds — described in the presentation as roughly $320,000 — to capitalize the new programs and that supervisors have sent a recommendation to the planning commission to raise the transient occupancy tax. Baitman said the supervisors recommended increasing the tax and that there will be further discussion about what portion of any new revenue the EDA would receive.

Tom Richardson, who led parts of the discussion, described the lending concept as gap financing to position small businesses for future private lending. Richardson said the EDA was considering loans roughly in the $5,000–$100,000 range, with example terms of a fixed, market-based rate (presentation used 3% as an illustrative figure) and flexible terms up to seven years.

Members discussed underwriting, borrower risk ratings, and operations. The EDA noted the Virginia Small Business Finance Authority offered to service loans for a fee and to share basic underwriting guidelines the EDA could adapt; final approval of loans would remain with the EDA.

The board voted to authorize a subcommittee — identified in the meeting as Rory Carter, Taran Bryce Rland, and Tom Richardson — to flesh out underwriting rules, approval thresholds and a risk matrix and to report back quarterly. The subcommittee will return with program parameters before the board adopts the final grant and loan rules.

Why it matters: If funded and adopted, the package aims to create an ongoing local capital source for small-business capital needs and to expand support to start-ups and established small employers that lack access to traditional bank financing. The proposal also relies on a future local tax decision and on legal guidance about how transient-occupancy dollars can be spent.

Next steps: The subcommittee will draft underwriting guidelines and program rules, return for board review and public adoption, and the board indicated it will consult counsel on statutory limits tied to tourism‑dedicated transient occupancy tax revenues.