Small Business Lending
Term Loans
Whether you are looking to stabilize or expand your business or are having trouble obtaining traditional financing, our term loans offer you the security of a consistent repayment plan while you increase your cash flow. Loans are often made in conjunction with bank financing and typically, the bank will have a senior position on assets.
- Loan amounts up to $2 million
- Secured position on all company assets
- Personal guaranty required by owners with 20% or greater equity
- Interest rate: 10% fixed
- Term: Up to 12-months interest only followed by a 10-year term and amortization
- Loan fees: 1% due at commitment and 1% due at closing
- No prepayment penalty
Lines of Credit
A line of credit will give your business financial flexibility to meet working capital needs. Lines of credit can renew based on your performance.
- Loan amounts up to $2 million
- Demand note
- Secured by a first on A/R and inventory, or by a priority lien on contract
- Personal guaranty required of owners with 20% or greater equity
- Eligible for one-year renewal or conversion to term loan
- A 1% renewal fee if renewed at MassDevelopment’s discretion
- Interest rate: BoA prime rate plus 1.75%
- 2-point commitment fee
- No prepayment penalty for the life of the line
Guarantees
We can provide a guarantee to enable banks to make an enhancement to their loan.
- Loan amounts up to $2 million
- Not to exceed 75% of the bank’s facilities
- Term loan or line of credit guaranty available
- Personal guaranty required of owners with 20% or greater equity
- 2-point commitment fee
- 2-point annual renewal fee
- No prepayment penalty for the life of guarantee
Are you looking for a smaller business loan?
Micro Loan
Our micro loans provide financing from $5,000 to $100,000 for Massachusetts small businesses to assist with working capital, or the purchase of furniture, fixtures, supplies, materials, and/or equipment.
Eligible Businesses:
- Existing businesses that have been actively operating for at least 12 months.
- For profit businesses or nonprofit childcare businesses.
- Headquarters in Massachusetts.
Loan Terms:
- Term loan from $5,000 to $100,000
- Amortization of up to 6 years
Requirements:
- Minimum personal credit score of 575
- No historical or pending charge offs by creditors permitted or existing government liens
- 2 years of tax returns; business and personal
- Lien on all business assets
- Personal guaranty (may require security)
- Certain industries are ineligible, including real estate investments
Need help with a micro loan?
Email Adam Keiser, Senior Credit Officer at akeiser@massdevelopment.com
Frequently Asked Questions
Do you fund all businesses?
Exclusions include real estate, startups, and illegal businesses.
Do you have to be located in Massachusetts?
The business must be headquartered in Massachusetts to qualify.
Are personal guarantees required?
Yes.
Do you lend to and work with nonprofits?
Yes.
Do you help pre-revenue businesses, startups, and/or early-stage businesses?
No. We often connect these young businesses with helpful resources.
Is there a minimum credit score?
No. We are more interested in the details of the report and will discuss with the applicant.
Are there any restrictions on use of proceeds?
Loans cannot be used toward the payment of taxes.
Preliminary Loan Evaluation Checklist
We have a wide range of creative products to fit small business needs, including financing collateral gaps, turnaround situations, acquisitions and more. There is some basic information our Loan Officers need to begin a loan evaluation:
- Loan amount requested and what it will be used for.
- Three years of year-end financial statements or tax returns (business and personal).
- Moste recent interim financial statements, including accounts receivable and accounts payable aging.
- Personal financial statements of principals/owners. A fillable document can be provided on request.
Business plan if available which includes:
- A brief description of your business and its products and services.
- Summary of management team experience.
- A description of your major customers.
- Your analysis of primary competition.
- Financial projects for the next two years.
