Mass. CUs back small biz with community development loan funds
MADISON, Wis. (1/26/16)--Three Massachusetts credit unions are participating in ventures to improve the economic prospects of businesses in their communities.
Merrimack Valley CU, Lawrence, Mass., is participating in a venture fund along with three other financial institutions. The fund, Lawrence Partnership, recently committed $1 million towards economic development in Lawrence (The Eagle-Tribune Jan. 25).
Among the ventures the partnership helped fund were a bakery and an auto accessory outlet.
La Cibaena Bakery owner Ramon Alberto will use a $75,000 loan to hire more workers and replace equipment. He purchased a new mixer to replace 70-year-old machinery. He also plans to buy a new oven.
St. Mary’s CU and Digital FCU, both of Marlborough, Mass., are participating in a revolving loan fund (RLF) program aimed at supporting local economic development.
The Marlborough Economic Development Corp. has launched the Marlborough Area Community Loan Fund, a local gap-financing measure to roughly 50 members of the Marlborough business community.
The RLF provides gap financing for local companies and entrepreneurs that wish to grow their businesses and create jobs, while ultimately revitalizing neighborhoods and enhancing property values. The program is funded through an equal public-private partnership with four local financial institutions, including St. Mary’s CU and Digital FCU.
The RLF program is a collection of local monies borrowed by business owners, recycled through repayment and re-used by future borrowers. The program allows companies to secure “gap financing,” which provides a bridge between the funding they have obtained through a private lender and the actual amount they need to start or sustain a business.