The Massachusetts Growth Capital Corp. has approved a $1 million loan fund for small businesses coping with lost revenue from this year's barrage of snowstorms.
The quasi-state agency will lend qualifying Massachusetts businesses $5,000 to $10,000 each, with the goal of distributing the funds within 48 hours after an application is received and approved.
"It's basically a micro-loan fund … to alleviate some of their need for working capital that's been affected by the storms," said MGCC president Lawrence Andrews. "We know this money has to go out fairly quickly because the need is so dire."
The three-year loans will have a 5 percent interest rate, and recipients must start paying back principal and interest after six months. There are no prepayment penalties or fees.
Businesses applying for the loans must submit a one-year financial statement, personal financial statement and the reasons for the need as part of the application process. The program is expected to run through May.
MGCC was established by the Legislature in 2010 and funded with $35 million in capital under the consolidation of the Massachusetts Community Development Finance Corp. and the Economic Stabilization Trust to help small business create jobs. It lends to small Massachusetts businesses that need capital but haven't been able to access traditional sources such as banks, and it provides technical assistance.
MGCC will use community development corporations, chambers of commerce and economic development offices of state Legislature-designated Gateway Cities to help facilitate the process.
The storm-related loan fund is a first for MGCC.
"The good thing is we've never had storms like this before," Lawrence said. "(The idea) really came from the businesses themselves, and we asked Gov. (Charlie) Baker basically if this was something that would be beneficial."
"As small businesses throughout Massachusetts continue to recover from extreme winter weather conditions that have restricted business, we are pleased to announce this low-interest loan program is available to help them regain their financial stability," Gov. Baker said in a statement. "While our local economies continue to bounce back, we encourage everyone to continue shopping at their local retailers, restaurants and small businesses."
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