Micro Lending
Empowering local individuals and organizations.
About our Lending Program
The Lower Cape Cod Community Development Corporation established the Micro Loan program with a grant from the Massachusetts Department of Housing and Community Development (DHCD) through the Town of Chatham.
Under the Micro Loan Program, the Lower Cape Cod CDC provides loans to qualified businesses of up to $40,000. These loans can be used for working capital, real estate for the use of small business, and for machinery and equipment.
Loan terms are normally up to five years. There are options to defer principal payments, amortize over longer periods or establish seasonal schedules as needed. Rates are competitive and will use the Prime Lending Rate as an index to assess loan rates.
In addition to the Micro Loan program, the CDC also offers a short-term loan option. Up to $10,000 may be borrowed for a period of a few months to a year. Interest is paid monthly and principal is repaid at the end of the loan term.
Eligibility Criteria
Businesses must meet several criteria in order to qualify for our Micro Loan program. Please read through these criteria carefully before completing a loan application.
Type of Business
Existing and start-up manufacturing, retail, wholesale and service businesses having five employees or fewer at the time of application and generally meeting the definition of small businesses. Owners must demonstrate low or low-to-moderate income in accordance with Federal definitions.
Location of Business
The program provides assistance to small businesses in Harwich, Chatham, Brewster, Orleans, Eastham, Wellfleet, Truro and Provincetown.
Jobs Creation Requirement
The small business has to demonstrate the potential for job creation, especially jobs which would be available to low- and moderate-income individuals. Jobs creation compliance will be monitored by the CDC semi-annually.
Management Capacity
The small business has to demonstrate management capacity and/or willingness to accept close management consultation and technical assistance throughout the life of the loan, if necessary.
Use of Funds
Micro lending funds from the Lower Cape CDC can be used to finance, in general, any customary capital or operating needs of the business with the exception of:
- Payment of delinquent taxes
- Product development costs
- Organizational costs
- Debt refinancing
Financing Gap
The small business has to demonstrate the lack of adequate capital or loan funds to fully finance the business needs and must have been rejected by a bank.
Loan Application Process
In order to process your business loan application in a timely manner, the following documents need to be submitted for a completed loan package:
- A completed personal financial statement
- Personal tax returns for the last two years (three years if a sole proprietorship)
- Inventory listing
- Equipment listing
- Projections for the second and third years on a quarterly basis
Existing Businesses (if not included in your business plan)
- A brief written history of your business; a description of your products and services; a summary of your previous business experience; a description of the key risks or challenges in your business and how you manage against them; and a description of the two main strengths of your business.
- Three years of business financial statements
- Interim financial statements (if year-end financials are over six months old)
- Business tax returns
The CDC provides Technical Assistance to applicants in developing the loan application, including a business plan and financial projections. Contact us for more information or to schedule an appointment.
Loan Decisions
Decisions on loans will be made on the basis of the following:
- A small business’ need for a loan
- A small business’ ability to create jobs and promote community service
- The character and management ability of the principals
- Cash flow available to repay the loan
- Collateral for the loan
For more information about the Lower Cape Cod CDC’s Micro Loan Program, please contact Moira Noonan-Kerry, Director of Economic Development, at (508) 240-7873 or via email.
Page last updated: January 7, 2008
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