Interim & Variable Rate Financing
VML/VACo Finance has been offering interim and variable rate financing since the introduction of its Commercial Paper Program in 2005. The Commonwealth Loan Program extended our capabilities even further, providing a no-closing-cost alternative for financing at low, floating rates. [How low are our interest rates? Check out the Rates & Yields tab on this website.] Moreover, VML/VACo Finance enables you to lock-in your interest rate through the long-term Fixed Rate Loan Program at any time after the initial loan closing.
Many of Virginia’s most astute localities have found our interim financing programs to be real cost savers in financing construction costs. Rather than financing an entire project in advance of construction—and paying interest on the full amount beginning on Day One—our flexible loan programs enable a locality to borrow just the amount it needs on an estimated monthly schedule. There is generally no need to monitor and report arbitrage earnings because you are never forced to borrow more than the amount you need to cover current project costs.
Throughout the program’s history, our monthly interest rates have been set at levels considerably less than long-term bond rates. In fact, over the past 25 years, Commercial Paper rates have been 2.0-3.0% lower on average than long-term bond rates. And now, we offer even greater peace of mind. With VML/VACo Finance’s Fixed Rate Loan Program, you can start out with a monthly interest rate and have the ability to lock-in a fixed interest rate at any time during the remaining term of your loan.
VML/VACo Finance’s interim and variable rate financing programs offer:
- Low or no upfront program costs;
- Project financing for terms from a few months up to 20 years;
- Lower financing costs by participating in a pool with other participants;
- Flexibility in scheduling a closing date that best suits your schedule;
- Minimum loan size generally $500,000; no maximum (Participants have financed as much as $75 million);
- An ongoing source of financing to use for various projects and/or cash flow requirements throughout the year;
- An easy process in which we handle all the details.