Economic Stimulator

Jo Bradley of the Vermont Economic Development Agency helps businesses help themselves through an array of financial commitments

by Amy Souza

Jo Bradley, executive director of the Vermont Economic Development Agency in Montpelier, considers herself to be a numbers geek. She says "everything is really a business," which is why she was drawn to VEDA.

I used to be a ski bum in Stowe," Jo Bradley says sheepishly. It's not hard to imagine that the well-dressed manager of the Vermont Economic Development Agency once spent her days schussing down the slopes. Skiing is a long-time Vermont tradition and is one reason Bradley stayed connected to her home state through a military-brat childhood and a seven-year stint in Boston. Plus, she looks the part, with blond hair, a slight tan and a ready smile.

It's been a long journey from the ski trails of Stowe to her office on East State Street in Montpelier.

Bradley's maternal ancestors were original settlers of Waterville in Lamoille County. Her father's family hails from Burlington. Bradley lived in Waterville between the ages of 4 and 10, but moved all over the Northeast as a child since her father was an engineer in the Air Force.

She attended the University of Vermont for a couple of years and then got married. She finished her undergraduate degree in history at Johnson State College, paying her own way.

Bradley waited tables and skied for a number of years after college and considered law school but decided against it after a little research. Business seemed truer to her nature. "I'm a numbers geek," she says. Adding: "Everything is really a business."

Bradley moved to Boston and received her master's in business administration from Boston University. While at BU, she developed an increasingly interest in the bond market "Bonds are kind of like puzzles," she says and went on to become bonds salesman at Salomon Brothers, an investment banking firm, where she worked for seven years.

She frequently visited Vermont on ski trips during her years in Boston before deciding to move back. She lives in Stowe. Her son, Eric, a carpenter, lives in Morristown.

In 1989 Bradley joined VEDA as a loan officer but left after five years to become the deputy secretary of the state Agency of Commerce and Community Development. In 1997 she returned to VEDA as the manager, where she heads a staff of 16. "There's not a lot of hierarchy here," she says. "Everything ends up (in my office) in one way or another."

VEDA was founded in 1974 with a million-dollar appropriation from the state. It was first a part of the economic development department, responsible for funding the building of industrial parks across Vermont and issuing revenue bonds and guarantees, strictly to help manufacturers.

Throughout the 1970s VEDA issued a lot of bonds, but in the mid 1980s as the tax laws changed the revenue bond market dried up and there were no appropriations to make up for the loss of bond income.

"By the early '90s, we were almost out of money," Bradley says. By 1995 very little money was being spent on economic development compared to education and municipal services, she adds. Across the country many economic development agencies were selling their loans, but Bradley didn't want to take that route.

"Using our loans as collateral, we issued bonds, took the proceeds and leveraged that reserve fund," Bradley says. "Now we could issue paper loans. That enabled VEDA to continue to make loans."

Two years ago the Legislature approved a one-time appropriation of $2.7 million to help VEDA pay down its interest rates. That, combined with a $25 million moral obligation bond from the state, has allowed VEDA to continue making loans.

"I really had two goals coming here as manager," Bradley says. "1) to solve any financial problems, and 2) to try to make the organization as independent as possible. As much as we can stand on our own two feet, that's a good thing."

VEDA has 12 board members, nine of whom are appointed by the governor and serve six-year terms. Three are ex officio: the state treasurer, the secretary of the state Agency of Commerce and Community Development, and the commissioner of the state Agriculture Department. The board meets once a month to consider loans, though loans under $250,000 may be approved directly by Bradley.

David Carter, chief financial officer, and Flo Lussier, senior account's manager, are two of 16 employees at VEDA, a state agency that has approved more than $700 million in financing commitments with less than a 1 percent loss rate.

Bradley says some people see government agencies mired in bureaucracy, where everything takes more time than it should. "We've tried hard to work on customer service and to turn loans around as quickly as possible," she says. "I've tried to bring some private sector mentality to try to solve our own problems."

VEDA is an authority governed by state statute. The Legislature determines the types of loans VEDA may make and the types of businesses and people who are eligible.

Over the years, VEDA's mandate has been modified and today, Bradley says, reflects the "three-legged stool" that makes up Vermont's economy: agriculture, manufacturing, and travel and tourism. Its loans and programs have helped many businesses with national recognition: Autumn Harp, Ben & Jerry's Homemade, Turtle Fur. Not to mention ski areas like Jay Peak,and Agri-Mark, the dairy cooperative.

VEDA goes where the projects are, Bradley says, but the staff keeps its eyes open for projects in areas where new jobs can have the most impact. When evaluating a project, VEDA staff looks for a complete business plan. Loan officers run the numbers to make sure the plan works and the company will be able to pay its loan. "We also look at wages and benefits that the company will be offering," Bradley says, though loan officers may be more flexible in defining an acceptable wage if a company plans to create new jobs in an economically depressed area like the Northeast Kingdom.

Vermont has several local and regional development organizations that work closely with businesses in their area and with VEDA's staff. VEDA also works closely with banks, and occasionally a business owner will contact VEDA, which funds only a portion of eligible projects. The other portion is generally funded by banks or other financial institutions.

"Applicants need to be serious because they're putting in their own money and they need to have another lender on board," says Tom Porter, a VEDA loan officer since 1986.

VEDA has too many programs to profile here "Every year we're given another program by the Legislature," Bradley says but its website ( offers a good primer. Among the programs VEDA offers are an agricultural loan program, a revenue bond program, Job Start and export finance programs.

"If it wasn't for VEDA well, we owe them a lot. Gov. Dean was smart to let them fund tourism."Mike Shea, Spirit of Ethan Allen

VEDA began an agricultural program in 1988 to help farmers consolidate their debts. That program evolved into the one offered today. Farmers may still apply for debt consolidation, but they may also apply for loans to buy equipment and livestock. Last year VEDA lent about $4 million to farmers.

"Farmers are a good risk; they pay their bills" Bradley says. "We take more risk than banks, but we have been rewarded by farmers' paying us."

VEDA's revenue bond program offers tax-exempt bonds and can benefit 501c3 nonprofit corporations.

The Shelburne Museum used money from that program to construct the Collections Storage Management and Library Building last year. The 10,000-square-foot building, modeled after a traditional Vermont barn and constructed by Pizzagalli Construction, won The Best New Building of 2000 award from the Associated General Contractors of Vermont.

"This program allowed us to finance at a much lower rate," says Catherine Ruley, director of finance and administration for the museum. The building needed to be big enough to store collections such as horse-drawn vehicles, and to have state-of-the-art air control systems to protect the museum's records and archive materials.

"This is the first time we financed a new building," Ruley says, "and the first time we worked with VEDA. We would certainly work with them again. The process is complex; however, the assistance we received from Steve Greenfield of VEDA and Giselle Kloechner at Howard Bank was terrific."

VEDA's Job Start program provides low- to moderate-income people with the opportunity to begin a small business. Bradley says it's a combination loan and social service program. Because many people have little to no collateral and possibly even bad debt, the deciding factor is sometimes the applicant's character.

Whether applying for Job Start loans or an industrial revenue bond, one thing is clear: People need to be prepared. A solid business plan is the only thing that will get them through VEDA's door.

As Mike Shea of the Spirit of Ethan Allen puts it, "You'd better know your stuff." Shea recently completed a $500,000 loan application that will allow his company to purchase a new boat a 500-passenger triple-decker that will be named the Spirit of Ethan Allen III. It has its own on-board galley, so "food will come out piping hot," he says. (The Spirit of Ethan Allen II will be renamed The Spirit of Plattsburgh and will cruise out of New York beginning next summer.)

"We were the first ones to get money when VEDA was allowed to fund tourism in 1995," Shea says. "If it wasn't for VEDA well, we owe them a lot. Gov. Dean was smart to let them fund tourism."

"With travel and tourism loans, we look not only at jobs created, but themultiplier effect: the capital that's brought into the state," Bradley says.

Shea worked with Chittenden Bank along with VEDA, which "asks for a lot of information," he says. "They're very thorough. They want to make sure you can make your payments. Both VEDA and Chittenden want you to succeed."

Porter, the VEDA loan officer, worked with Shea. "I like working with lots of different projects and different industries," he says. "My favorite project is usually the one I'm working on now."

Porter often works with nonprofits on the revenue bond program. "It's really blossomed in the past two years," he says, "but a lot of nonprofits still don't know they're eligible. We really want to get the word out."

VEDA's export finance program has grown every year since it began in 1996, says Marie Dussault, the VEDA loan officer who oversees the program. VEDA is the Vermont partner with Export Import Bank of the United States (Ex-Im), a government-held corporation focused on helping U.S. companies export their goods.

Dussault explains how this program can help Vermont companies. Most businesses have lines of credit with banks, but many banks won't allow foreign receivables to count a businesses' borrowing base. Export insurance available through Ex-Im allows a bank to include those foreign receivables in the borrowing base, giving the local company access to more working capital.

Many U.S. companies export goods on a cash-on-delivery basis only, since it's usually more difficult to collect payment from foreign customers. Export insurance will cover any unpaid bills, which means Vermont companies can offer their foreign customers open credit terms which, in turn, means the customer may purchase more products or reorder more frequently.

Across their programs, VEDA assumes a bigger risk than commercial banks because it has to, Bradley says. "Our mandate is to take a bigger risk. And, we have to look at the economic development benefit."

Still, VEDA has had a less than 1 percent loss rate in direct loans since its inception, with more than $700 million in financing commitments. Bradley credits that to careful analysis by VEDA staff.

Steve Greenfield, deputy manager, and Marie Dussault, community loan officer, are constantly in and out of the executive director's office. Dussault oversees VEDA's export finance program, which has grown every year since its inception in 1996 and works with a government-held corporation focused on helping U.S. companies export their goods.

"Also, we'll work longer with a company over a period of years to get repaid," she says. Banks, which are responsible to their shareholders, don't have the same luxury of time.

Jo Bradley still skis, just not as much, and today; not many people would be inclined to call her a bum. She volunteers on the planning commission and the zoning board in Stowe. She is chairwoman of the special events committee of the Vermont's Annual Business and Industry Exposition and often accompanies loan officers on initial visits.

VEDA's annual report is peppered with photos of VEDA staff visiting loan recipients. It's clear from their smiles that people at VEDA enjoy their work. "I get to live vicariously through the people we give loans to," Bradley says. "I drive around the state and see companies we've helped. It makes you feel good about what you do. I feel so connected to Vermont."

Originally published in October 2001 Business People-Vermont