Community bankers in West Virginia generally know more about a customer’s business than anyone outside the family who runs it. They often get the call when a manufacturer wants to add a production line, or when an employer’s next move could spur new jobs well beyond its current payroll. In my experience, that relationship is one of this state’s many economic advantages.

But growth doesn’t always fit what a community bank can lend. A company can have a good plan and a strong banking relationship and still need a longer time horizon, more flexible terms, or a structure that doesn’t eat into working capital while it expands. Other times, a business has simply grown past the lending capacity of the bank that helped it get there.

None of that has to mean the relationship gets left behind. Bring in a capital partner with the scale to write a bigger check and the patience to structure it right, and the local bank can stay exactly where it belongs — at the center of the relationship — while the company gets access to the kind of capital that used to mean going elsewhere.

What WVEDA Already Offers — and Where It Stops

West Virginia already has real tools for this. Through its Business and Industrial Development Loan Program, the West Virginia Economic Development Authority (WVEDA) can finance up to 100% of a qualifying project’s cost for land, buildings and equipment; where the Authority lends less than the full amount, it looks to other sources — often a participating bank — to complete the project. The program draws on a revolving loan of up to $175 million from the Board of Treasury Investments, with a $15 million cap per project.

The Authority’s revolving Insurance Fund is the risk-sharing piece; it can insure a bank’s loan to a company, including working-capital loans and, where they support job creation or expansion, certain refinancings. The WVEDA generally can’t make a working-capital loan itself — but it can stand behind the capital partner that does.

For larger capital investments, the WVEDA can also issue revenue bonds and notes, the familiar industrial-revenue-bond route. And through its management of the Jobs Investment Trust, it reaches early-stage and higher-risk equity that a bank isn’t built to provide.

Those tools cover a lot of ground, but each is built for a specific situation: a fixed-asset loan, a credit enhancement, a bond-eligible project or early-stage equity. The WVEDA is an important part of business development in West Virginia, but plenty of established businesses may fall outside those lines. They aren’t startups chasing venture money, and what they need isn’t just a fixed-asset loan. They’re financing an acquisition, buying out a retiring owner, or building the systems and staff needed to serve a larger market.

A New Tool That Closes the Gap

The West Virginia First Small Business Growth Program was built to close the gap. It’s designed to bring patient, flexible growth capital to established businesses across the state, giving companies another way to invest in what’s next without trading a hometown banking relationship for a bigger check. And Spilman Thomas & Battle was proud to work with the legislature to bring it into being.

Advantage Capital, a leading small-business investing firm, is one of the partners helping to deliver that capital. As a firm with a national footprint, it brings the scale and access to capital markets needed to fund expansion that a single community bank often can’t provide on its own. They pair that with a model built around working through, not around, the local relationships that already know the business: the bank, WVEDA and the company’s own management team. The firm has spent more than three decades investing in businesses that conventional capital tends to overlook, including many in rural and economically distressed markets. In its experience, the best deals come down to local knowledge, solid underwriting and people willing to stay in it for the long run.

Getting this program on the books took real work from bankers, business owners and advocates across the state who saw the gap and pushed to close it. Advantage Capital was among that group, and it’s good to see the legislation turn into something companies can actually use.

Where the Bank Still Fits

Growth capital isn’t a substitute for a community bank. If anything, it can make that relationship stronger. The bank keeps doing what it does best — knowing the customer, understanding the local market and providing the debt that’s the backbone of most deals. A partner like Advantage Capital adds another layer: the reach of a national platform, applied through a structure built to work alongside the bank rather than replace it.

For a bank, that’s a way to stay in a customer’s corner even after the customer has outgrown what the bank alone can lend, or when the plan is more complicated than a standard loan can handle. Instead of losing the account to a larger institution, the bank can help assemble a financing package that provides the customer with what it needs, while decisions are still made close to home.

Every deal is different, and all of this remains subject to program requirements and underwriting. But it’s worth a conversation when a business is adding equipment or expanding a facility, pursuing an acquisition or a new market, financing an ownership transition or investing in what it takes to scale.

Worth a Conversation

West Virginia isn’t short on good businesses, good lenders or communities that understand what a strong employer means to a town. What’s needed is a way to connect those pieces to a wider set of capital tools.

This program doesn’t ask banks to hand off a good customer — it gives them another way to keep one. For businesses, it’s a chance to grow without leaving the relationship that got them this far.

Spilman, in conjunction with Advantage Capital, looks forward to working with community banks, WVEDA, and businesses across West Virginia to identify deals where growth capital and traditional lending align — keeping more of West Virginia’s growth and its benefits close to home.

In the next issue of West Virginia Banker, we’ll take a closer look at the intricacies of the West Virginia First Small Business Growth Program. In the meantime, please reach out with any questions.