Virginia 501(c)3 Tax Exempt Bond Program

Virginia Small Business Financing Authority


Tax-exempt bond financing offers qualifying non-profit organizations the ability to access a low cost of capital for their long-term financing needs, which helps the organization reduce financing costs, improve cash flow and utilize the savings to expand programs without having to sacrifice needed capital improvement projects. Its objective is to help nonprofits in Virginia access capital. There is no maximum limit on the dollar amount of bonds which can be issued on behalf of 501(c)3 organizations. Because, however, of the initial transaction costs associated with this type of financing, it is typically not advantageous to issue bonds for projects which are below $1,000,000 in size.

Program cap is $1 million per bond. There is an application fee of $1,000. Annual fee of one-tenth of one-percent of the outstanding principal amount of the bonds, capped at $250,000.

Eligible Recipients:

Non-Profit Organization

Eligible Recipients Detail:

Eligible Borrowers: Only those non-profits which are designated as 501(c)3 corporations by the Internal Revenue Service will qualify. The 501(c)3 certification must be evidenced by a determination letter from the IRS or other qualifying evidence. Examples of non-profits that will qualify as 501(c)3s are educational facilities, health care facilities, retirement, nursing or long-term care facilities, YMCA-type facilities and office buildings for use by the staff of the nonprofit organization.

Eligible Purpose:

Broadband Enabled Devices; Building Infrastructure; Last Mile Infrastructure

Eligible Purpose Detail:

In general, tax-exempt financing may be used for the construction or acquisition of land and buildings, and for the purchase of equipment, furniture, fixtures or leasehold improvements. Certain closing costs can also be financed in the bond amount, provided that not more than 2% of the bond amount is applied to these costs.