LYNN — The Small Business Administration hand-delivered $200,000 in assistance to city officials on Tuesday morning to help support Lynn businesses.
Small Business Administration district director Robert H. Nelson stopped by City Hall to present a $200,000 loan to Mayor Thomas M. McGee and James Cowdell, Economic Development and Industrial Corporation of Lynn (EDIC/Lynn) executive director, which will be used for EDIC/Lynn’s microloan program.
“We appreciate the confidence the SBA continues to show in Lynn by supporting this critical loan program,” McGee said in a statement. “The success of small businesses is in direct correlation to the overall health of the economy. This funding will allow us to make a significant impact for many small businesses in Lynn.”
Cowdell said on Tuesday EDIC/Lynn makes loans to small businesses anywhere from $2,000 up to $50,000, which have to be paid back within five years. He said the loans have a fixed 4 percent interest rate and are for start-up businesses or existing businesses looking for equipment.
Microloans can be used for working capital, inventory and supplies, furniture, machinery and equipment. EDIC/Lynn has awarded more than $125,000 in microloans over the last 18 months. Recipients have included Arts After Hours, Busy Bee Nursery School, Christopher’s Cafe, Globo Services, Los Chamos restaurant, Luna Sweets bakery and Prism Products.
Cowdell said the SBA has been providing funds to EDIC/Lynn for the past 25 years. He said EDIC is a lender — depending on the size of the loan, sometimes EDIC will match up with a local bank and partner with the bank to make loans.
McGee said the purpose of that is to make the loan even bigger — the collateral is the original loan to get a bigger loan to do a larger project.
Cowdell said the SBA funding is competitive. He said it’s been a few years since EDIC/Lynn has received funds from the SBA — the last time EDIC/Lynn received money from the SBA, it was for $40,000.
“I think it’s a sign that they really believe in Lynn and they want to invest in Lynn,” Cowdell said on Tuesday.
Cowdell said the microloan program is an invaluable resource for businesses looking to establish themselves or take their businesses to a new level.
“The ongoing investment in Lynn by the SBA allows us to provide important financial support,” he said in a separate statement. “These loans can often make the difference for a small business trying to take the necessary steps to survive in a competitive environment. We are grateful that the SBA gives us the resources to continue to invest in businesses that want to make an investment in our city.”
McGee said the SBA funds have really been maximized to help some businesses get off the ground. He highlighted the possible benefit to the arts and cultural district and downtown, which is starting to be more of a focus. But he said the funding for the microloan program wouldn’t just be focused downtown.
“So, it doesn’t matter throughout the city,” McGee said. “It could be Wyoma Square. It could be anywhere in the city where people are looking to create businesses and (we’re) excited about all those opportunities, but there’s been been a real spark happening downtown.”
Cowdell said the “primary area of lending for us is the central business district,” but that doesn’t mean that it’s the only area.
As an example of how the funding can be used, Busy Bee renovated classrooms and made other improvements, allowing the school to increase enrollment. Christopher’s was able to buy kitchen equipment, a heating and air conditioning system, a fire-suppression system, and make other capital improvements.
According to the SBA, small businesses are Massachusetts’ No. 1 private-sector job creators. The goal of the SBA’s microloan program is to help a new business get off to the right start and assist business owners as they grow successful enterprises.
“This is part of what SBA does, trying to make sure that all small businesses have access to capital,” Nelson said. “With the microloan program, it couples technical assistance together with the capital, so that’s what makes the microloan program even more impactful because the small businesses, they get the knowledge and skills and specialized assistance so that they can be successful.
“The microloan program is really important, so I’m really happy that we’re able to provide another loan to EDIC/Lynn.”