SBA gives Lynn $250G to disperse as micro loans

LYNN – Local small businesses could soon benefit from $250,000 in federal government funding that the Lynn Economic Development and Industrial Corp. has received in order to make micro loans that can be used for materials, supplies, furniture, fixtures and equipment.U.S. Small Business Administration Director Robert Nelson announced the so-called recapitalizing funding to Mayor Judith Flanagan Kennedy, EDIC Executive Director James Cowdell and other local officials at City Hall last week.According to Nelson, more small businesses in Lynn will be eligible for business loans as a result of the program, which is locally administered by EDIC as an SBA micro-lender.The $250,000 SBA loan to EDIC will enable the nonprofit agency to make loans to small businesses in amounts ranging from $5,000 to $35,000. Micro loans can be used for working capital and acquisition of materials, supplies, furniture, fixtures and equipment.The announcement marked the third time the SBA has lent money to EDIC for the program. As part of the SBA micro-loan program, grant funding has been made available to help Lynn small businesses with technical assistance.In the past year, the EDIC made three SBA micro loans totaling $79,000.”Entrepreneurs need alternative sources for loans as well as access to business training,” Nelson said. “SBA micro lenders provide in-depth business education to their customers to complement the business loans they may not have been able to obtain elsewhere. We’re pleased to be able to partner with an excellent organization like EDIC to meet the need for small loans and training in Lynn.”Cowdell noted that small businesses in Massachusetts are the No. 1 private-sector job creators. “Due to these historically tough economic times, we have been inundated with loan applications from businesses that were denied loans through traditional lending practices,” he said. “These funds are very much appreciated and needed.”The micro loans come with a 4.5 percent interest rate, about two points below what banks are offering, Cowdell said.Helping a new business get started and assisting business owners as they grow successful enterprises is the ultimate goal of SBA’s micro-loan program, said Nelson, adding that an essential element of a successful small business is a business plan.The EDIC can help its clients create a business plan and provide other types of assistance, Cowdell said.For more information about SBA’s micro-loan programs, call 617-565-5590 or go online to www.sba.gov/ma