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MAC Resource: Massachusetts Community Development Finance Corporation

Massachusetts Community Development Finance Corporation (CDFC) is a quasi-public corporation authorized by the Massachusetts legislature in 1975, under the statute of Chapter 40F, as one of the nation's first state-level community economic development finance institutions. The core mission of CDFC was to bring new economic activity and good quality jobs to Massachusetts' low-income areas working in conjunction with community development corporations (CDCs). Over the past three decades, CDFC designed programs and activities in response to the expanding development activities of CDCs, new legislative mandates, and its own innovations to better address the capital availability problems of small businesses and lower income communities.

Today CDFC concentrates in lending to small business throughout the Commonwealth and plans to become a better recognized and more active economic development lender.

Achievements:

  • Invested over $75 million
  • Over $14 million in assets under management
  • Created and funded the first Contractor Working Capital and Surety Financial model in the USA

MCDFC Loan Guidelines

Loans from $100,000 to $500,000

Revolving Line of Credit:

  • Purpose: Accounts receivable and inventory
  • Interest Rate: Variable - Prime plus 3% with floor of 10% and a ceiling of 15%
  • Financing Fee: 2% commitment fee plus 1% annual fee
  • Maturity: 12 months, with renewal option
  • Attorney and Transaction Costs: Paid by borrower in addition to financing fee.

Term Loans:

  • Purpose: Equipment purchase and working capital
  • Interest Rate: Fixed -Prime plus 3% with floor of 10% and a ceiling of 15%
  • Fees:  2% commitment fee
  • Maturity: Up to 5 years based on the useful life of equipment, if applicable. Loan amortization is equal to loan term.
  • Attorney and Transaction Costs: Paid by borrower in addition to financing fee.

Contractor Bond Guarantee:

  • Annual Fee: 2% of Letter of Credit (LOC) amount
  • Collateral for Guarantee: 90% from CDFC, 10% from contractor
  • Attorney and Transaction Costs: Paid by borrower in addition to financing fee

All applications are available online. Prior to completing an application, you will need the following information:

  • Completed CDFC Application
  • Statement of Sources and Uses of Funds
  • Accountant prepared financial statements and/or tax returns for the three most recent fiscal company year-ends
  • Current interim:
    •  Balance Sheet
    •  Profit and Loss statement
  • Current aging of:
    •  Accounts receivable 
    •  Accounts payable
  • Business Plan including:            
    • Financial projections (with supporting information) including
    • Balance sheet, Income and Cash Flow statements
  •  Personal Financial Statement for each owner with a 20% or greater equity interest

Would you like to learn more about how we can help your business? Please contact us at

CDFC
155 Federal St.
Suite 202
Boston, MA 02110
Telephone: (617) 523-6262
Fax: (617) 523-7676
E-mail: MALoans@mcdfc.com
Web: http://www.mcdfc.com

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