Getting Initial Money to Go from Nothing to Something

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Margaret Somer, Regional Director Small Business
Development Center, Northeast Mass Salem State
College
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Massachusetts Small Business Development Center
Network www.msbdc.org
Small Business Development Centers Central MA
SBDC - Clark University - Worcester Northeast MA
SBDC - Salem State College Southeastern MA
Regional SBDC Fall River UMass Boston SBDC -
Boston Western MA Regional SBDC - Springfield
Berkshires SBDC Pittsfield PTAC Government
Contracting Mass Export Center
Network funding key partners U.S. Small
Business Administration MA Dept. of Business
Technology UMass Amherst and other institutions
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• GOVERNMENT FINANCING FOR BUSINESS
• Why does government provide business financing
  and services?
• To stimulate technological scientific
  innovation and the development of new products
  that government seeks, (SBIR RD grants for new
  products in defense, environmental
  contamination)
• To generate economic activity, jobs and business
  opportunities
• To promote and retain employment and upgrade
  workforce skills, (Massachusetts Workforce
  Investment Fund)

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• GOVERNMENT FINANCING
• To create new financing models for the private
  sector to adopt (MTDCs financing of early stage
  technology companies in the 70s minority
  business financing affordable housing in the
  80s, )
• To support projects with significant economic
  impact (ATMP Advanced Technology
  Manufacturing Ctr. in Fall River Devens, a
  former MA military base located in four towns
  Enterprise Center in Salem)
• To leverage and stimulate private sector
  investment (SBA loan guarantees, quasi-public
  financing..)

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• FEDERAL GOVERNMENT BUSINESS FINANCING
• U.S. Small Business Administration www.sba.gov
• SBA Loan Guarantees
• SBA 504 Program acquisition of property
  equipment, etc. (the business finances 10)
• Disaster Loans
• Export loans
• SBIR - Small Business Innovation Research Grants
• STTR Small Business Technology Transfer Grants

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• SBIR - Small Business Innovation Research Grants
• 2.5 set aside from federal agencies since 1982
• Stimulate technical innovation in small business
  communities to meet federal RD needs and
  commercial potential
• PI must be employed by small business
• STTR Small Business Technology Transfer
• Stimulate scientific and technological innovation
  through cooperative RD carried out by small
  businesses and research institutions.
• Foster technology transfer between small
  businesses and research institutions.
• PI may be employed by small business or research
  partner.

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• SBIR / STTR 3-Phase Program
• Phase 1
• Up to 100K and 6-12 month award - Feasibility
  study
• Phase 2
• Up to 750K and 2-year award
• Full research / RD
• Phase 3
• Commercialization stage
• Company raises funds on its own

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• SBIR - Small Business Innovation Research Grants
• Who participates? 66 have 2-24 employees.
• SBIR / STTR Criteria Phases 1 and 2
• Strength of scientific/technical aspect of work
• Ability to carry out project in cost-effective
  manner
• Project or commercial impact on US economy
• Evidence of commercial potential (Phase 2)

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• SBIR / STTR Resources
• www.sbirworld.com
• www.pnl.gov/edo/sbir
• Individual agency websites
• SBIR newsletters and email lists
• SBIR conferences and workshops

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• MASSACHUSETTS QUASI-PUBLIC
• LENDERS INVESTORS
• Mass Technology Development Corp. MTDC
• Mass Technology Collaborative
• MassDevelopment Funds such as Emerging
  Technology Fund for tech-based manufacturing
  facilities equipment
• The Business Development Company
• MA Community Development Finance Corp. CDFC

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• MASSACHUSETTS QUASI-PUBLIC
• LENDERS INVESTORS
• MCRC - MA Capital Resource Company
• MCRCs Life Insurance Initiative capital for
  economic development
• Property Casualty (Insurance) Initiative
  Community Development Initiative
• MA Economic Stabilization Trust - manufacturing

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• MASSACHUSETTS QUASI-PUBLIC LENDERS INVESTORS
• (and many more focused on later stage
  companies)
• Mass Technology Development Corp. - www.mtdc.com
• Equity sub debt for early stage technology
  companies since 1982
• Usually 250-500K
• Jobs leverage technical innovation nurture
  entrepreneurship
• Mass Technology Collaborative - www.mtpc.org
• Debt/equity for renewable energy technology firms
• Massachusetts Workforce Training Fund -
  www.detma.org/workforce
• Matching grants for workforce development

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• CITIES, MICROLOAN FUNDS, NON-PROFITS
• Debt and microloans for gap, business and project
  financing
• Business incubators with a range of services and
  networks (ATMP, Enterprise Center at Salem State
  College)
• Loan Funds City of Lynn, MA
• Microloans up to 35,000
• Term loans up to 350,000
• Loans up to 3 million for major development
  projects

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• Other Interesting Resources
• Circle Lending www.circlelending.com
• Manages lending among family and friends -
• MA Alliance for Economic Development-www.massecon.
  com
• Assistance with site location

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• Margaret Somer, Regional Director
• Small Business Development Center (SBDC)
• Northeast Region - Salem State College
• 121 Loring Ave., Suite 310
• Salem, MA 01970
• Tel. [phone], x. 1
• msomer_at_salemstate.edu
• www.salemstate.edu/sbdc