By Mike LaBella The Eagle-Tribune, North Andover, Mass.
WWR Article Summary (tl;dr) Four areas banks have come together to help local entrepreneurs get the money they need, along with expert technical support.
Trying to launch or expand a small business can be a challenge, especially when you can't get a loan from a bank for reasons such as a lack of collateral or a proven track record.
And even if you obtain funding, you might not have the business acumen needed to succeed.
To help Haverhill entrepreneurs get the money they need, along with expert technical support, four areas banks have come together to launch the Haverhill Partnership Venture Fund.
The goal of this pilot program is to provide a local source of business loans for new or growing Haverhill-based businesses that are not yet able to access conventional bank financing.
The Haverhill Partnership Venture Fund is a collaboration between Mill Cities Community Investments and four other local financial institutions: Align Credit Union, Enterprise Bank, Haverhill Bank and Pentucket Bank. Each of the banks has seeded the fund with $125,000 in capital -- for a total of $500,000 -- that will be made available to qualifying businesses.
Mill Cities is serving as the lender.
Chuck Walker, president of Pentucket Bank, said that under normal circumstances, banks tend to loan to existing businesses that demonstrate an ability to pay back a loan.
"Banks look for a borrower to provide equity or collateral," he said.
Walker said the loans being made available through this fund can be considered more risky than a normal business loan, which is why the participating banks are sharing the risk.
"It's more than funding, as it provides technical assistance to ensure the likelihood of success," he said. "The technical assistance is a condition of the loan as we really want these businesses to maximize their opportunity to be successful."
The fund was introduced Thursday during a ribbon cutting for "Welcome to Floristry," a new business at 600 Broadway that is one of the first in Haverhill to obtain a loan through the fund.
Owners Tammy Rogers and Tom Burgess said that in addition to a loan, the assistance they received from Frank Carvalho, executive director of Mill Cities, was invaluable to getting their business off the ground.
"Although I didn't need a lot of capital, I had been denied by a bank," Rogers said. "Frank sat down with me and taught me everything I needed to know about starting and running a business. He taught me how to be a businesswoman."
Rogers said she has skills, having worked in the florist industry for more than 30 years, but that she lacked the financial savvy needed to run her own shop. She said she learned those skills with the help of Carvalho.
Her background includes doing work for television and movies, including working as the florist for the HBO miniseries, "Olive Kitteridge," and for the TLC reality TV series, "Four Weddings."
"I did the finale," Rogers said of the Four Weddings program.
City Councilor Joseph Bevilacqua, who attended Thursday's ribbon cutting, said the Haverhill Partnership Venture Fund will help businesses succeed.
"This is exactly what's needed to assist small startups get established in Haverhill," Bevilacqua said.
Mayor James Fiorentini, who also attended the ribbon cutting, said the number one request he gets from entrepreneurs looking to launch a business in Haverhill is how to get funding.
"Many of them are not eligible for a typical loan," the mayor said. "With help from this fund, entrepreneurs like Tammy can get a business going and bring jobs to our city."
Carvalho said that as a lender, his organization also works with owners on their business plan and helps them understand the impact of their financial decisions.
State Rep. Andy Vargas, who also attended the ribbon cutting, called the fund a "tremendous opportunity for small business growth and entrepreneur growth in the city of Haverhill."
"Access to technical assistance and access to capital are the two pillars to launching any business," Vargas said. Modeled on the success of a similar fund led by Mill Cities Community Investments in neighboring Lawrence, the Haverhill Partnership Venture Fund is the result of initial conversations about Haverhill small business needs between MCCI, Pentucket Bank, Haverhill Bank and MassDevelopment's Transformative Development Initiative Fellow, and follows on technical assistance completed by MassDevelopment identifying a local small business loan fund as a need.
Align Credit Union and Enterprise Bank have also enthusiastically been bought into the vision.
"The fund is a common-sense approach and by sharing the risk it can benefit small and emerging businesses in Haverhill," said Ray Wrobel, vice president of commercial lending for Align Credit Union.
The five financial institutions aim to lend the pilot funds in year one and recapitalize (renewing the revolving fund as money is paid back), hopefully attracting other local financial and community organizations, as well as the city itself, to participate going forward, Walker said.
For more information about the venture fund, contact Frank Carvalho at [email protected] or call 978-258-2772, ext. 13.