South Eastern Economic Development (SEED) Corporation announced today that it has received new grants and interest free loans totaling $3.8 million to make additional small business loans in Massachusetts and Rhode Island. SEED also reported that in fiscal year 2016, which ended September 30, it had made 69 small business loans totaling $17 million and assisting in the creation of 272 new jobs.
“The $3.8 million in new capital together with SEED’s existing capital base of $8 million will enable SEED to continue meeting the financing needs of small businesses in MA and RI for loans up to $250,000,” explained Maria Gooch-Smith, SEED’s executive director. She added that loans under $100,000 were the most difficult for small businesses to obtain.
Gooch-Smith reported that 12 financial institutions provided contributions to match a $1.4 million grant from the Community Development Financial Institutions Fund, and assisted with the loan loss reserve fund for a new $1.25 million SBA interest free loan for micro loans up to $50,000. SEED also received a $250,000 grant from the State of Massachusetts, and a $100,000 grant and $900,000 interest free loan from RI Commerce Corp.
“We would like to thank the State of Massachusetts, RI Commerce and the financial institutions which provided a total of $125,000 in contributions: BayCoast Bank; Bristol County Savings Bank; Cambridge Savings Bank; Cape Cod Five Cents Savings Bank; Dedham Savings Bank; Eastern Bank; First Citizens Federal Credit Union; HarborOne Bank; Mansfield Bank; Middlesex Savings Bank; Rockland Trust Company; and Webster Bank,” added Gooch-Smith.
The 69 loans made by SEED in 2016 included: 21 loans closed and 20 approved under the SBA 504 Program for at total of $15.5 million; and 28 small loans ranging from $10,000 to $177,000 for a total of $1.4 million. “Without SEED’s micro loans up to $50,000, small loans up to $250,000, and SBA 504 loans up to $5.5 million, many small businesses would not be able to start-up, expand and create new jobs,” stated Gooch-Smith.
SBA 504 loans are made in participation with financial institutions, and provide an attractive option for small businesses undertaking real estate projects, and financing heavy machinery and equipment. The down payment is generally only 10 percent, and the interest rate is currently 4 percent fixed for 20 years. Participating financial institutions can assist a small business while mitigating their risk by providing 50 percent of the financing in front of the 40 percent provided by the SBA 504 loan.
According to Gooch-Smith, SEED’s flexible small loans up to $250,000 can be used for any business purpose, and assist small businesses which can’t qualify for conventional financing alone due to tight cash flow; insufficient collateral, start-up status, or lower personal credit scores, but are viable community businesses which create jobs and are important to the region’s economy.
This past year, SEED also held 28 free Entrepreneurial Workshops throughout the region attended by 333 existing and prospective entrepreneurs, and provided business technical assistance to another 572 individuals. The workshops were sponsored by the following banks: Cape Cod Five Cents Savings; Dedham Savings; Eastern; Martha’s Vineyard Savings; Rockland Trust; and Webster. Rockland Trust also contributed $25,000 to SEED’s Business Assistance Program. SEED worked with the Small Business Development Center, chambers of commerce, and community organizations to deliver its Business Assistance Program.
SEED is a non-profit economic development corporation established in 1982 to assist small businesses in the region. SEED makes loans from a $1,000 micro loan to a $5.5 million SBA 504 loan to assist small businesses to grow and create jobs. In 34 years, SEED has made 2,012 loans totaling $351 million, leveraging $730 million in bank loans and private funds, and assisting in the creation of 12,346 jobs.
For more information about SEED’s loan programs, please call 508-822-1020 or visit SEED at www.seedcorp.com.
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