SEED established this program with grants from the U.S. Economic Development Administration (EDA) and the State of Massachusetts. Since 1984 SEED has received a total of $4 million in grants to provide gap financing to small businesses.
Under a special grant from the EDA through the state of Massachusetts, 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 35 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 below market and fixed for the term. Check current interest rates.
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 job retention and other economic development impact in lieu of jobs.
Process
SEED’s Loan Committee approves loan applications. Normally it takes 15 days or less to obtain approval if SEED has all the required information. 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:
- Business Plan for start-up business including Projected Income Statement, Monthly Cash Flow for the First 12 Months, and Day One Balance Sheet. SEED has Business Plan Booklets available.
- Documentation on the Use of Loan Funds such as Purchase and Sale Agreements, Quotes and Estimates.
- Collateral Information such as Appraisals, Tax Assessments and Invoices.
- A Balance Sheet and Profit and Loss Statement and Income Tax Returns for the Business for the last 3 years and Interim Statements no older than 90 days.
- Resumes of Principals, or Personal Data Sheet (SEED Form).
- Personal Income Tax Returns for the last 2 years for Principals with 20 Percent or More Ownership.
- Signed IRS Certification (Form 4506) – Please sign; SEED will fill out.
- Personal Financial Statement (Form 413) – Please fill out or provide a bank form.
Fees
SEED Corporation charges a $50 non-refundable processing fee. In addition, one point on the loan is charged prior to closing along with closing costs.
For more information, please contact SEED Corporation.
SEED is an equal opportunity lender and business assistance provider.
