Federal grant will assist lender to help more businesses
By G. Michael Dobbsnews@thereminder.com
HOLYOKE A recent federal grant will enable local businesses to have additional resources to grow.
Common Capital received a $500,000 grant recently from the U.S. Treasury Community Development Financial Institution Fund to increase its ability to loan money to small to mid-size businesses in Western Massachusetts.
Common Capital is a private non-profit Community Development Financial Institution based at Open Square that has been making loans to local businesses since 1989. Those businesses have included Hot Table restaurant in Springfield, the Magic Wings Butterfly Conservatory in South Deerfield and the River Valley Market in Northampton.
With the grant, Common Capital's lending capacity is now more than $5 million.
Christopher Sikes, the CEO of Common Capital, told Reminder Publications the grant not only increases the lender's own resources, but also would be used to leverage other funds. He added the grant would also provide more security for the loans that have been made.
He explained that about 35 percent of the loans are made to start-up businesses, many of which are weak on collateral. The loans can range from "micro enterprise" to $8,000 to $12,000 to a maximum of $300,000. Common Capital has also been part of agreements with other lenders to write $1 million loans.
The businesses that have come to Common Capital are a "broad spectrum" he said, that includes both retailing and manufacturing. The organization works with the Western Massachusetts Economic Development Council and the Pioneer Valley Planning Commission in assisting local businesses.
Sikes said that business activity in the region slowed down in 2008 when the recession hit, but since 2009 "there has been a pretty steady pickup in business coming to us."
With the recession, businesses didn't want additional risk by borrowing or by increasing their inventories, he said. He has seen "much steadier, more positive growth in the last eight to 12 months."
"This is an investment that pays for itself. Since 2006, Common Capital has leveraged over six dollars for every dollar it has lent to local businesses," said Congressman John Olver. "I am enormously pleased that Common Capital has been awarded these federal dollars to support their business lending and outreach services and create local jobs at a time when they are most needed."
For more information on Common Capital's lending services, log onto www.common-capital.org
or call 420-0183.