Lancaster County EDA outlines $320,000 capitalization, new grant and loan programs and eyes hotel-tax revenue

The Lancaster County Economic Development Authority on July 16 reviewed its finances and advanced plans to capitalize new small‑business grant and loan programs with about $320,000 in ‘poorhouse tract’ funds and potential future hotel‑tax revenue.

John Bateman, who presented the financial report, said the ‘‘poorhouse tract fund is about $320,000’’ and that the county board discussed increasing the transient‑occupancy tax above the current 2% and possibly matching Kilmarnock’s 8%. Bateman said any net new hotel‑tax rate would take effect Jan. 1, 2027, if the board of supervisors adopts the change and decides how much to allocate to the EDA. "State code mandates that revenues generated at a rate greater than 2% up to 5% must be used for tourism‑related activities," Bateman said, noting the legal constraint on some hotel‑tax uses.

The authority reviewed two proposed grant tracks modeled on Portsmouth’s programs: a Smart Start business‑development grant intended for very new firms (proposed cap $2,500, no match) and a Business Acceleration matching grant (proposed cap $5,000, reimbursed at 80% with a 20% applicant match). Bateman said the acceleration grant would reimburse eligible purchases and that applicants would need to complete activities and request reimbursement within 90 days of award.

Bateman also described a revolving‑loan fund option and recommended exploring administration through the Virginia Small Business Finance Authority or a community development finance institution. He said the EDA had received a template and draft memorandum of agreement for review and asked the board to request the authority’s credit policy to inform underwriting standards. "We had discussed partnering with the Virginia Small Business Finance Authority," Bateman said, adding that the EDA would need to define eligibility, collateral and monitoring.

Members emphasized process and oversight. One member recommended requiring clear business plans and matching documentation to avoid repeated low‑quality applications; another suggested an abridged template to standardize submissions. The board discussed caps on repeat applications and setting a funding pool per program year so grant spending is budgeted rather than uncapped.

Bateman listed recent grant disbursements and account balances during the meeting: the community partnership checking began April 16, 2026 at $34,797.41, disbursed grants (examples cited: Naughty Needle $1,500; Joe’s Grill $1,500; Sweep and Mop LLC $1,500; Irvington Virginia Business Association $3,500; and a $10,000 item transcribed as "RCC Turn Dynamics"), and reported an ending checking balance of $16,834.55. A county CD was renewed at 1.599% and will mature on Nov. 30, 2026.

Next steps assigned at the meeting included forming a small loan subcommittee (members: the chair, Roy and Taryn) to work with the Virginia Small Business Finance Authority; Bateman said he would request the authority’s credit policy and produce revised program documents. The board also agreed to research account options and set up a designated interest‑bearing money‑market or similar account to receive any transferred poorhouse‑tract funds before program launch.

Bateman and members tentatively discussed a Jan. 1, 2027 target to begin accepting applications if the board of supervisors finalizes any hotel‑tax rate change and the EDA completes program rules. The EDA will return to the next meeting with marked‑up program documents and implementation details.

The authority took no formal funding action at the July 16 meeting; members directed staff to follow up with the Virginia Small Business Finance Authority, circulate policy drafts for comment and reconvene the loan subcommittee.