Revolving Loan Fund

SEED established this program with grants from the U.S. Economic Development Administration (EDA) and the Massachusetts Department of Housing and Community Development (DHCD). Since 1984 SEED has received a total of $3.2 million in grants to provide gap financing to small businesses.

Under a special grant from the U.S. Economic Development Administration through the state, SEED extends loans to the fishing, and fishing related industries and also administers an EDA funded pool for the City of Brockton. Bank of America provided the match for the Brockton fund.

Loan Amount
Under the RLF Program, SEED provides loans up to $200,000 which can be used as the down payment on a larger project. The SEED portion of the project is generally 25 percent or less, although in cases where there is a larger financing gap, SEED’s portion can be greater.

Eligible Businesses
Manufacturing, retail, wholesale and service businesses: net worth not in excess of $2 million; less than $750,000 average net profit after taxes during the previous two years.

Eligible Projects
Acquisition of land and buildings; construction and/or renovation; equipment and furnishings; and working capital. There has to be a demonstrated need for the loan.

Loan Term
Up to 10 years with options to defer principal payments, amortize over longer periods or establish seasonal schedules as needed.

Loan Rate
Generally at 80% of prime and fixed for the term.

Loan Collateral
All appropriate business assets, personal guaranties and personal assets as necessary to collateralize the loan.

Job Requirement
SEED generally requires that a business create one job for each $10,000 of SEED investment. On a $200,000 project, in which SEED is contributing $50,000, SEED would like to see five new jobs created in the next two years. SEED will consider other economic development impact in lieu of jobs.

Process
SEED’s Loan Committee meets at least once a month to approve loan applications. Normally it takes 30 days or less to obtain approval. SEED can close on a loan as soon as the client closes with the lending institution if there is one involved. The following is the information needed to review a loan application:

• Brief history and background (Business Plan for start-up business);
• Statement on the use of funds (quotes, invoices);
• Business financial statements and IRS returns for the past 3 years;
• Interim financial statement no older than 120 days (can be done in-house);
• Projections (at least one year), including an Income Statement and a Day One Balance Sheet for start-up businesses;
• Personal financial statements for principals with 20% or more ownership and personal IRS returns for the past 2 years; and
• Appraisals (copy of existing appraisal or tax valuation accepted).

Fees
SEED Corporation charges a $50.00 non-refundable application fee. In addition, one point on the loan is charged prior to closing along with closing costs.

For more information, please contact Laurie Walsh.

SEED is an equal opportunity lender and business assistance provider.