SEED secures $1M for microloans

TAUNTON – The South Eastern Economic Development Corp. (SEED) has secured $1 million from the U.S. Small Business Administration (SBA) for microloans up to $35,000 for small businesses in Massachusetts and Rhode Island.
“We are very pleased to have SBA funds available to assist small businesses in both states in these difficult economic times. The need for microloans has grown exponentially. SEED will have up to $3.5 million available from SBA to meet demand,” said Maria Gooch-Smith, SEED’s executive director.
As the new SBA intermediary lender for the Rhode Island Microloan Program, SEED will also be holding a free entrepreneurial workshop on Tuesday, March 24, at Johnson & Wales University’s Larry Friedman International Center for Entrepreneurship in the Taco Center, 10 Abbott Park Place, Providence.
Microloans up to $35,000 are available for existing and startup small businesses, including home-based businesses. Loan funds can be used for working capital, inventory, machinery and equipment, furniture and fixtures, leasehold improvements and refinancing business credit card debt with high interest rates. The term on the fixed-rate loans is up to six years currently at 6.5 percent.
According to Gooch-Smith, 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 income 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 available or not,” she explained.
The application process includes filling out SEED’s application form and providing federal income tax returns for three years for the small business and the owner.
SEED has administered an SBA Microloan Program in Massachusetts for the past 10 years, making 300 microloans totaling $6.6 million and assisting in the creation of 865 new jobs. “SEED’s microlending experience has proven that microloans, often ‘character’ loans, do get paid back,” said Gooch-Smith.
For more information about the SBA Microloan Program, the free entrepreneurial workshop and other SEED loan programs, call (508) 822-1020 or visit SEED at seedcorp.com.