The South Eastern Economic Development (SEED) Corporation announced that micro loan limits have increased from $35,000 to $50,000 to better assist small businesses.
“The increase in the micro loan program will go a long way to ensure small businesses have enough funds to meet their needs. As a result, we hope to assist many more businesses with this program,” stated Laurie Driscoll, SEED’s assistant vice president and commercial loan officer.
“With their micro loan program, SEED provides an invaluable resource for the borrower and small-scale business owner. Increasing the ceiling for micro loans should lead to a greater demand for loan services,” said Mark S. Hayward, director of the U.S. Small Business Administration (SBA) Rhode Island District Office.
According to Driscoll, micro loans are available to all types of existing and start-up small businesses including home based businesses. The funds can be used for equipment, furniture and fixtures, working capital, and paying off high interest rate credit cards used for the business. The term on the loans is up to 6 years and the current interest rate is 6 percent fixed with no prepayment penalty.
As the designated micro lender for Rhode Island, SEED has access to $5 million from SBA for micro loans. So far, SEED has made 14 micro loans totaling $403,000. The following small businesses have received micro loans:
Kathleen’s Wildflower Florist, Ltd., Barrington
Glow Oil, Inc., Lincoln
Newport Potters Guild, Inc., Newport
Moody Machine Products, Inc., Providence
JM Painting & Plastering, LLC, Cranston
A.G. Services, LLC, Providence
Continental Travel Agency, Smithfield
Groh Associates, Warwick
Bailey T’s Resortwear, LLC, Newport
Castle Awards, LLC, East Providence
Just Ride, LLC, Newport
OM Kids Yoga Center, Pawtucket
According to Driscoll, small business owners need to have at least a 600 credit score and be able to explain delinquencies. She added that SEED will be reviewing the small business owner’s entire household income to see if there is enough to repay the loan.
“SEED can be flexible with repayment terms and collateral, but we expect small businesses to stand behind their loans and will take all available collateral including a second or third position on the small business owner’s home, whether there is equity or not,” she explained.
“Often entrepreneurs start their small businesses with funds from savings or home refinancing, but in this recession these funds have diminished, as savings and the equity in homes have been depleted – that’s where SEED comes in,” explained Driscoll. “In some cases, small businesses just need a loan for working capital to continue operating,” she added.
“The process for obtaining a loan consists of filling out a simple two page application form which can be obtained through SEED’s web site www.seedcorp.com or by calling SEED at 508-822-1020,” added Driscoll. A business plan is required for start-up businesses and Driscoll suggests attending one of SEED’s free monthly Business Basics Workshops. A free Business Plan Booklet is available on SEED’s web site.
SEED staff works closely with the RI SBA, RI Small Business Development Center (RISBDC), Center for Women & Enterprise (CWE) and SCORE (Counselors to America’s Small Businesses) and has an office within the RISBDC at Johnson & Wales University on 270 Weybosset Street in Providence.
SEED is a non-profit economic development corporation certified by SBA in 1982 to assist small businesses in the region. Under various loan programs, SEED makes loans from $1,000 to $5.5 million to assist small businesses to grow and create jobs.
For more information about the SBA Micro Loan Program, free entrepreneurial workshops and other SEED loan programs, please call 508-822-1020 or visit SEED at www.seedcorp.com.
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