WICKED LOCAL MARLBOROUGH – With hope of strengthening the city’s economy, Marlborough Economic Development Corporation officials are seeking to establish a revolving loan fund for new and existing small businesses.
The fund would provide gap financing for prospective business owners to launch new companies and existing entrepreneurs seeking to expand and create jobs. The funds would fill the gap between loans businesses obtain from banks and the total amount they need to launch or grow, said agency Executive Director Tim Cummings.
Cummings described revolving loan funds as “a proven best practice” that could help draw more small businesses to the city.
“We also listened to our local small businesses, who told us that from time to time, and especially early on, they need a flexible lending program that offers a low interest rate or a deferred payback schedule as a tool to help them get over the initial hurdles,” said Cummings.
The agency is seeking a $100,000 appropriation from the city for the loan fund. The City Council Finance Committee is expected to discuss the request this week.
Four local banks, Digital Federal Credit Union, St. Mary’s Credit Union, Avidia Bank and Marlborough Savings Bank, have each pledged $50,000 for the program, said Cummings.
If approved by the Finance Committee and full City Council, prospective and existing business owners could apply for loans through the program, which would be reviewed by the agency, said Cummings.
“Smaller companies often have a hard time acquiring adequate loans from the banks, which makes it difficult and even impossible for them to launch or grow,” said Cummings. “But if they have a good concept and a solid business plan that will create jobs and enrich the community, there is no reason why they shouldn’t get the support they need.”
Cummings noted that businesses will be required to pay back their loans as if they were borrowing independently.
Cummings is hopeful the fund can bring business that helps revitalize neighborhoods and increase property values.
“(Small to medium-sized enterprises) are the fabric of the local economy and a revolving load fund is one of the best ways to support them,” said Cummings.
This article by Jeff Malachowski originally appeared here.