Massachusetts Small Business Loans & Grants

Millions of small businesses operate successfully each year, but not many without the help of some form of financing.

Businesses in nearly all industries face funding needs, from expansion and marketing to purchasing equipment, a new office space, or inventory. Without the assistance of affordable financing through a variety of sources, many small businesses would ultimately have to close their doors.

In Massachusetts, small business owners have a bevy of options when it comes to obtaining financing. Massachusetts small business grants, small business loans, and funding through investors are all available to qualified companies.

Understanding the options available as well as how to go about getting a specific type of funding can make a significant difference in the overall success of a business in Massachusetts.

Here are several financing opportunities offered specifically to small businesses operating in the state.

On this page:

• Small Business Grants
• Small Business Loans
• Investment Opportunities
• Other Sources of Funding
• Preparing for Financing
• Choosing the Right Type of Financing

Massachusetts Small Business Grants

Massachusetts small business grants are available to certain companies based on the type of services or products they provide as well as their size and mission.

The benefit of getting a Massachusetts small business grant is the fact that funds do not need to be repaid as they do with other financing sources, including small business loans or investments.

Grants for small businesses are highly competitive, so it is necessary to take a close look at the eligibility requirements and funding criteria prior to applying.

MassMEP Express Program

Funded through the Manufacturing Extension Partnership, MassMEP Express is a grant offered to companies with 100 or fewer employees for training needs. A list of preregistered courses are available after a company pays into the Workforce Training Fund, and grants amounts of $3,000 per employee, per course, are available to those who apply and are eligible. Grants are available on a rolling basis.

MassMEP General Program

Another grant option for Massachusetts companies, also offered through Manufacturing Extension Partnership, is MassMEP General. With this grant opportunity, businesses of any size may qualify for training grants of up to $250,000. The grants are awarded on a rolling basis and offered to entities in need of workforce training for new or current employees.

Cambridge Savings Charitable Foundation Grants

Offered by the Cambridge Savings Charitable Foundation, this business grant is available in amounts from $1,000 up to $5,000 for non-profit businesses operating in Eastern Massachusetts. Businesses eligible for that grant must provide human services, housing, or community development programs that benefit residents in their communities. The application deadline is May 31st each year.

United Bank Foundation Grants

Another option for non-profit businesses operating in Massachusetts is the United Bank Foundation Grants. This award is available starting at $5,000 per business working in community and economic development programs for underserved residents of the state. Companies that have some involvement with United Bank employees or customers are given priority. The application deadline is August 19th of each year.

DIA Workplace Safety Grant

The DIA Workplace Safety Grant is administered by the state of Massachusetts, and it is made available to any organization or company that is covered by worker’s compensation laws. The grant, available for up to $25,000, is meant to cover some of the training costs associated with creating and maintaining a safe and healthy workplace. Applications are accepted on a rolling basis, with grants awarded on a first-come-first-served basis.

MassDEP Air Quality Grants

Also offered through the state of Massachusetts, the MassDEP Air Quality Grant is available for financial and technical assistance expenses for certain public and private organizations. Businesses eligible for this grant work on projects that help reduce nitrogen oxide and greenhouse gas emissions. Grant funding of up to $7.5 million is available and applications are accepted on a rolling basis.

Agricultural Energy Grant Program

Grants of up to $25,000 are available under the Agricultural Energy Grant Program for certain businesses operating in Massachusetts. The program is meant to offset the cost of agricultural energy projects that work to improve energy efficiencies and the adoption of alternative energy in the state. Businesses can apply through May 31st.

Small Business Loans in Massachusetts

Another option for funding is Massachusetts small business loans. Unlike grants, loans are meant to be repaid over time, but they offer a fixed and often low interest rate along with predictable payments over the course of several months or years.

Small businesses loans can be used for several different financing needs, including equipment purchases, inventory, expansion, marketing, or working capital needs.

Here are a few local banks offering Massachusetts small business loans.

Eastern Bank

As one of the largest and oldest mutual banks in the country, Eastern Bank offers several Massachusetts small business loans to companies operating in the state. The financial institution is named one of the leading Small Business Administration (SBA) lenders in Massachusetts, and it offers both 7(a) and 504 loans through the SBA’s lending program.

Eastern bank also provides access to preferred term loans, lines of credit, and commercial real estate financing to qualified businesses.

The most popular Massachusetts small business loans from Eastern Bank, the preferred term loan, is available for up to $100,000 in financing with a five-year repayment term. Businesses may need to meet minimum revenue requirements as well as time in operation criteria to qualify.

Interest rates offered on Eastern Bank small business loans are fixed, but only businesses that submit an application or visit a branch location receive rate options and ranges.

KeyBank

Headquartered in Boston, KeyBank is another large provider of Massachusetts small business loans. The bank offers a variety of financing options, including SBA loans, equipment financing, term loans, lines of credit, and real estate loans for businesses.

For its small business term loan, KeyBank offers loans as low as $10,000, with the maximum loan amount dependent on the time a business has been in operation and the planned use of the loan.

Interest rates are fixed but depend heavily on the credit standing of the business owner and amount of the loan. Repayment terms can extend up to 10 years, based on the amount borrowed.

Berkshire Bank

Small business owners in Massachusetts may also find financing help through Berkshire Bank. This local financial institution offers SBA loans and lines of credit, term loans, equipment financing, and commercial real estate loans to qualified business owners.

With its term loan, Berkshire Bank provides access to funding up to $5 million with low, fixed interest rates and repayment terms from three to seven years. Business applicants may need to meet certain credit requirements to qualify as well as have a minimum revenue based on the industry in which they operate.

Small Business Investors in Massachusetts

Small business owners in Massachusetts also have access to investors as a source of funding. Unlike grants and small business loans, financing from outside investors is often predicated on the exponential growth of the business in terms of revenue and market share.

Investors provide access to financing that is repaid in the form of debt or equity securities, not loan payments, so this can be a way to access larger amounts of funding for the long-term.

Here are a few options for Massachusetts small business investors.

MassVentures

MassVentures is a venture capital group focused on bringing financing opportunities to small businesses throughout Massachusetts. The organization offers initial venture capital infusion to technology-driven companies across many different sectors, including healthcare, automation and robotics, digital media, green technology, and mobile services. Inquiries can be submitted online directly to MassVentures.

New England Venture Capital Association

The New England Venture Capital Association is a venture capital group serving high-growth companies in the New England region. The organization is comprised of more than 700 venture capitalists and investors, spanning more than 80 investment firms. The majority of the investors who make up the association focus on early-stage funding as the first institutional round for companies.

Boston Seed Capital

Boston Seed Capital is a venture capitalist group offering seed-round funding to qualified high-growth businesses in Massachusetts. The firm focuses investments in technology-driven companies, as the first round of significant financing. Inquiries about funding opportunities and amounts available can be directed to the organization online.

Other Sources of Small Business Financing

Although Massachusetts small business loans, startup grants, and outside investors from local sources may be helpful, there are other options for finding the right financing solutions.

Several online lenders offer funding to qualified small businesses around the country, including those located in Massachusetts. Here are a few of our favorites.

Fundbox

Fundbox is an online lender offering invoice financing to qualified small businesses. Invoicing financing requires you to sell outstanding invoices in exchange for a lump sum payment, and then repay the amount through the collection of those invoices over a 12 to 24 week period.

Fundbox offers financing up to 100% of outstanding invoices, between $1,000 and $100,000, for businesses that have at least $25,000 in annual revenue. Businesses are also required to have an invoicing system that integrates directly with the lender to qualify for financing.

Applications for funding can be completed online with a quick approval timeframe. The fees depend on the amount of time requested for repayment, but all are calculated as a flat fee.

BlueVine

Similar to Fundbox, small businesses with outstanding invoices may find financing solutions through BlueVine, an online lender. BlueVine offers invoice factoring with amounts between $20,000 and $2.5 million, up to 90% of outstanding invoice amounts.

Repayment takes place over a maximum 12 week period, and businesses must have annual revenue of at least $60,000 to qualify. A minimum credit score of 530 is also required. BlueVine also charges a fee for access to funding, ranging from 1% to 4% per week.

Applications can be submitted easily online and funding can take place in as little as one business day.

>> Read More: Fundbox vs. BlueVine for Invoice Financing

FundingCircle

FundingCircle is another option for small businesses in Massachusetts, although it does not offer invoice financing. Instead, the online lender provides access to small business loans, even for those with less than perfect credit.

The lender allows loans between $25,000 and $500,00, with fixed interest rates starting as low as 4.99% but extending up to 27.79%. Repayment can be as short as six months or as long as five years, with monthly fixed payments.

Small businesses may qualify based on their personal credit history and score, not necessarily time in business or industry served. Applications can be submitted online in as little as ten minutes, and funding can take place in a few business days.

Getting Your Business Ready for Financing

With any type of financing for your business, there are certain steps you need to take to ensure you’re ready to apply.

For grant funding, having a solid mission statement and business plan, along with business bank account and financial details is incredibly helpful. Grant administrators want to see what your business can and will use the funds as intended to meet a specific goal, such as workplace training.

For small business loans, many lenders require businesses to have organized and up-to-date financial documents in order. These may include a balance sheet, income statement, and cash flow statement, as well as projected revenue or past tax returns to prove profits or losses. Small businesses may also be required to provide personal financial information, such as personal credit report and score, bank accounts, and net worth to qualify for a business loan.

Outside investors may require different details on the business, such as a business plan, projections of market reach or revenue, and a detailed list of the management team of the business. Investors want to feel confident that their capital will lead to exponential growth, so companies seeking this type of financing need to prepare documents and presentations that show this potential.

Choosing the Right Type of Financing

With so many different types of financing available to small businesses, it can be a challenge to know which avenue makes the most sense for your specific business needs. Here are a few things to consider when determining the type of financing your small business requires.

Business Line of Credit

Small businesses with unpredictable or changing financing needs are likely better suited for a small business line of credit. This type of financing offers ongoing access to funding, up to the available credit line.

As borrowed funds are repaid, the credit line becomes available again and can be used over and over for other financing needs. There may also be fewer restrictions on what expenses business lines of credit may be used to cover.

Business Term Loan

When a small business knows the amount of financing they need upfront, a business term loan is a smart solution. This is because small business loans come with predictable repayment terms, often extending several months to several years.

Lenders also provide fixed interest rates on term loans, unlike the variable rates that come with business lines of credit. Financing large expenses, such as inventory or equipment can typically be done efficiently with a small business loan.

Choosing a Lender

Choosing the type of lender can also be a challenge. Local banks and credit unions offering small business loans may be more inclined to lend to companies that have an established track record of revenue and strong business credit or personal credit history.

Online lenders, however, are not always so restrictive in the businesses they lend to, making it easier to get financing if business credit is low or revenue isn’t yet high. However, bad or no credit small business financing vehicles often come with higher interest rates and fees, along with shorter repayment periods.

Be sure to review the terms and costs of any financing solution before signing on the dotted line.

Bottom Line

Small businesses in Massachusetts have several options for financing, including small business and startup grant funding, small business loans, local investors, and online lenders. Not every business will qualify for each type of financing, and not every financing option is the best fit for a small business.

Each financing solution comes with advantages and downsides which should be considered carefully, alongside an understanding of what is required for repayment over time.

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