Anne Arundel Economic Development Corporation serves as a manager of Maryland's Small, Minority and Women-Owned Business loan fund, which receives 1.5 percent of video lottery terminal revenue from Maryland casinos. AAEDC's allotment of $2 million is distributed through its VOLT Fund.  Small and minority, women and veteran owned businesses located within 10 miles of any of Maryland's three casinos and those located elsewhere in the state may be eligible for loans of between $25,000 to $500,000 for purposes such as business and commercial real estate acquisition and expansion, lease-hold improvements, equipment and vehicle purchase, and working capital.  AAEDC anticipates that under the VOLT Fund, seventy percent of its funds will be distributed to conventional small businesses and thirty percent will be directed to entrepreneurs of emerging technology.

Loans to Small Businesses

  • $25,000 - $500,000
  • Priced at or below current market interest rates
  • Eligible purposes: business acquisition, commercial real estate acquisition, building improvements, equipment purchase, leasehold improvements, business start-up costs, refinancing of existing debt, except refinancing where the lender is in position to take a loss, and working capital
  • Eligible entities include start-ups and existing businesses
  • Use of standard underwriting practices; factors to be considered include repayment capacity, financial strength of the company and guarantors, industry and management experience, and collateral protection
  • Settlement facilitated with the assistance of outside attorneys
  • Post-closing: Servicing, loan monitoring, billing, and collections administered by AAEDC financial services staff

Loan Requirements

  • Personal credit (640 or above)
  • Historical Debt Service Coverage Ratio (DSCR) of 1.00x or projections with assumptions showing 1.00x DSCR
  • Collateral required when available
  • SBA guaranty may be required
  • All owners over 20% must personally guaranty the loan
  • Life insurance on owner/guarantor where no valid succession plan is in place
  • Minimum equity injection of 10% for start-up businesses
  • Business plan required for start-up businesses

Loans to Technology Businesses

  • Loans to promising early stage companies to help attract follow-on funding from venture capital firms, angel investors and other sources
  • Loans of $100,000 to $250,000

Eligibility Criteria for Technology Businesses

Ideal applicants will meet most or all of the following criteria:

  • High potential early stage small, minority and women-owned technology company with clear path to follow-on funding, particularly engaged in cybersecurity, energy, life sciences or Health IT
  • Affiliated with a business incubator that is a member of the Maryland Business Incubation Association (MBIA) is preferred, but not mandatory
  • Defendable intellectual property with clear ownership or licensing arrangement
  • Team led by an experienced entrepreneur or demonstrates willingness to acquire needed management talent
  • Recognizable $20 million addressable market
  • Cash flow break-even is reached within 18 months

Excluded Transactions and Industries

  • Financing existing debt where the fund is in position to take a loss
  • Loans to effect ownership change that will not benefit the business
  • Loans for the reimbursement of funds owed to an owner or reimbursement of equity injection
  • Loans for repayment of delinquent state or federal taxes
  • Non owner occupied real estate
  • Firms involved in speculative activities that develop profits from fluctuations rather than the normal course of trade
  • Firms involved in lending activities
  • Pyramid sales plans
  • Firms involved in gambling activities
  • Adult bookstores, other adult entertainment facilities, gun shops, liquor stores, pawn shops, tanning salons, tattoo parlors and check-cashing services

Download the Following Documents:

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