Small Loan Program

MA Small Business LoansSEED established this program with grants from the U.S. Economic Development Administration (EDA) , the Community Development Financial Institution (CDFI) fund, and the State of Massachusetts. Since 1984 SEED has received a total of $7.6 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.

SEED has also received loan funds from RI Commerce Corporation for small business loans in Rhode Island.

Loan Amount

Under the Small Loan Program, SEED provides loans up to $250,000.  The SEED portion of the project is generally 35% or less, although in cases where there is a larger financing gap, SEED’s portion can be greater.

These loans are usually made in participation with a financial institution, and SEED takes a subordinate position. If a financial institution cannot participate, SEED can still consider the loan.

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 for improvements to real estate for the business; leasehold improvements; 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 up to 20 years, 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 $20,000 of SEED investment. On a $200,000 project, in which SEED is contributing $60,000, SEED would like to see three 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 loans via email or at a meeting. 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 a Business Plan Booklet available.  (Please save a blank copy of the business plan booklet to your desktop before filling out electronically).
  • Online Process
  • 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 2 years and Interim Statements no older than 180 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-T) – Please sign; SEED will fill out.
  • Personal Financial Statement (Form 413) – Please fill out or provide a bank form.

Fees

SEED Corporation charges a $60 non-refundable application fee. In addition, one point on the loan is charged prior to closing along with closing costs (variable).

For more information, please contact SEED at (508) 822-1020.

SEED is an equal opportunity lender and business assistance provider.

SEED Corporation, 80 Dean Street, Taunton, MA 02780

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