New Small Business Lender Emerges
With times still lean and credit less plentiful than it was a few years ago, it may gratify some small businesses to know that a new financing option is on its way. The Massachusetts Growth Capital Corp. is scheduled to officially open its doors next month.
The quasi-public corporation, created this year as part of a major reorganization of state economic agencies passed by the Massachusetts Legislature, is less a brand-new entity than the reorganized version of existing state programs. But supporters say it will offer some new funding opportunities.
“This is particularly good news for small businesses with trouble accessing funds,” said Sen. Karen Spilka, D-Ashland, the main force behind the agency reorganization.
Financial Inheritance
As of October, the MGCC will consolidate the offices of the Community Development Finance Corp. and the Economic Stabilization Trust.
It will inherit funds from those predecessors, including $15 million from the state’s Emerging Technology Fund, and will also receive $20 million from a new state bond authorization.
Spilka said the new agency will offer a more convenient one-stop process for businesses looking for state loans. And she said it will use new techniques to make the loans more effective.
In a move drawn from venture capital firms, the state is requiring businesses that receive loans through the MGCC to get consulting support from the agency as well.
“We found that research showed that it increases the likelihood of success for a small business,” Spilka said.
Michael S. Lanava, business resource manager for the Worcester Regional Chamber of Commerce, said the funds can help businesses in many circumstances, from companies fighting for survival to those that need a little extra help to expand into new space.
He said the MGCC structure should make things more convenient for applicants.
“Instead of necessarily having to apply at all these agencies… all that money will be pooled together,” he said.
The consolidation is still under way. The new agency is forming a 12-member board chaired by the state’s secretary of housing and economic development, as required by the legislation.
Spilka said the MGCC should be actively in business, working to hand out loans by the end of the year.
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