SEED Receives Grant from U.S. Department of Commerce Economic Development Administration CARES Act Funding
[August 28, 2020] The South Eastern Economic Development (SEED) Corporation has been awarded a $3.6 million grant from the Economic Development Administration CARES Act Recovery Assistance Fund under the U.S. Department of Commerce. This new award is in addition to SEED’s current EDA grant funding of $3 million in support of the growth and development of entrepreneurs and small businesses in the South Eastern Massachusetts region. Counties covered by these EDA funds include; Barnstable, Bristol, Dukes, Essex, Nantucket, Norfolk, Plymouth and Suffolk.
“We are very fortunate to receive this grant which will increase SEED’s total capital to $15.5 million for small loans up to $250,000. These funds will enable SEED to provide critical gap financing to small businesses and entrepreneurs adversely affected by the coronavirus pandemic across Massachusetts. With the increased funding, SEED will be instrumental in the stabilization and rebuilding of main street businesses which play a critical role in restoring the economic stability of our region. Jobs will be retained and new opportunities created, goods and services will be available to underserved markets and economically distressed areas, and the tax basis of the Commonwealth will be sustained,” stated Susan Murray, SEED’s Executive Director.
SEED is a non-profit corporation established and certified by SBA in 1982 to assist small businesses in the greater Boston area, Southeastern MA including the Cape and Islands, and all of RI. Under various loan programs including the SBA Micro Loan Program and the SBA 504 Program, SEED makes loans from $1,000 to $5.5 million to assist small businesses to expand and create jobs. Over the past 38 years, SEED has made 2,227 loans totaling $375 million, leveraging $800 million in private funds, and assisting in the creation of 13,750 new jobs.
“SEED’s small loans can be made in conjunction with a financial institution, or standalone depending on the situation and use of funds. SEED can be flexible with repayment terms, collateral, and personal credit scores, but requires jobs to be created or retained with these loans,” explained Murray.
According to Murray, SEED’s gap loans can be used to purchase real estate, make leasehold improvements, acquire machinery and equipment, furniture and fixtures, and for working capital. The term is up to 10 years with the option for longer amortization depending on loan purpose. Interest rates are competitive or below market for the level of risk and are currently between 5%-6%.
As an Intermediary Lender under the U.S. Small Business Administration (SBA) Micro Loan Program, SEED also has access to $5 million for loans up to $50,000 across all of Massachusetts and Rhode Island. These loan funds may be used for working capital, equipment, furniture and fixtures, and refinancing of business credit card debt or high interest loans for start-up and existing small businesses.
SEED is also a Community Development Financial Institution (CDFI) under the U.S. Department of the Treasury, receiving $3.9 million in federal grants, matched by $850,000 in state grants. Banks and Credit Unions may earn valuable CRA credits by partnering with CDFI’s in their region. SEED has also been awarded $1.2 million in grants from Rhode Island Commerce Corporation for small loans in RI.
SEED also provides technical assistance to small businesses and works with other economic development organizations, SBA Resource Partners, and financing institutions in the region to ensure that individuals who are committed to owning and operating a small business are able to obtain the assistance they need to be successful.