Bay Colony Newswire

Bay Colony saw a busy start to 2010 with numerous projects obtaining SBA 504 funding. Below are just a few of the projects that we’ve arranged financing for:

MLS Sheet Metal

• Project was for the $470,000 purchase of vicon coil line equipment
• Company estimates creating 2 new jobs over the next two years
• Enterprise Bank (Patty Wilson) provided the senior financing

Evolution Beauty Supply and Salon

• Project was for the $448,000 purchase of the building
• Company estimates creating 4 jobs over the next two years
• Enterprise Bank (Richard Chavez) provided the senior financing

GF Sales

• Project was for the purchase and renovation of building for a total cost of $900,000
• Company estimates creating ten new jobs over the next two years
• TD Bank (Bayard Read) provided the senior financing

Gooby Industries d/b/a Century Box Company

• Project was for the purchase of $2,430,500 in equipment
• Company estimates creating 41 jobs in the next two years
• Century Bank (Brad Buckley) provided the senior financing

Irinoula Hospitality Group d/b/a Comfort Inn & Suites

• Project was for the $4.2 million expansion to the hotel
• Company anticipates creating 7 new jobs over the next two years
• Berkshire Bank (Bill Davis) provided the senior financing

Nitor Corp.

• Project was for the construction of a new facility for $664,000
• Company anticipates creating 3 new jobs over the next two years
• Bank of Western Mass (Jim Carvalho) provided the senior financing

Pridestar EMS

• Project was for the construction of $1.8 million ambulance facility
• Company anticipates creating 15 new jobs over the next two years
• Lowell Five Cents Savings Bank (Robert Dolan) provided the senior financing

Despite the economic downturn and recession, we’ve had one of our best years to date at Bay Colony!  Our track record of success is proof that New England’s small businesses are thriving and helping bring our country out of the worst economic conditions in recent history.  Check out some of our 2009 statistics:

• In Bay Colony’s 28-year history, the SBA has only declined two of our loans, the last one being six years ago.

• In FY 2009, which ended 9/30/09, SBA 504 Loan volume experienced a 27% nationwide decline. Bay Colony recognized a 93% increase in loan volume for this same period and had the second largest year-over-year dollar volume increase in the country.

• In FY 2009, during a recession, SBA 504 Loan volume still exceeded $195,000,000 in New England alone.

• Most loans are fully approved in less than 2 weeks, usually before the bank has reached a final decision.

• Our loan volume for the quarter ending 12/31/09 is on pace to be one of, if not the biggest quarter in Bay Colony’s 28 year history.

If you are you interested in expanding your business in 2010, look here for more information about the SBA 504 Loan or start your application process here.

The Obama administration has proposed a series of propositions to relieve financial tension and expand business for America’s business owners. Highlighted below are three of the most important initiatives announced by the president that will affect you:

Relinquishing fees and increasing guarantees for loans backed by the SBA:

Increasing guarantees would help calm fear among lenders, who are cautious about new SBA loans. “They’re being told not to take additional risks,” says Chris Hurn, co-founder and chief executive officer of Mercantile Capital Corp., an Orlando, Fla.-based lender that issues commercial real estate loans through the SBA’s 504 loan program. “And in banking parlance, a risk is a loan.”

SBA programs are in obvious need of a boost. The number of 7(a) and CDC/504 loans fell 35% in fiscal 2009. The number of banks issuing these loans increased, thanks to American Recovery Act guaranteeing 90% of each loan. In a press release in November, SBA said that it had depleted stimulus cash for both the 7(a) and 504 loan programs and closing the line for ARRA loan applications in the New Year.

Eliminating capital gains taxes on small business investment for a year:

Just a day after President Obama announced his plan, the House of Representatives voted to increase the capital gains tax rate for venture capitalists and hedge fund managers to 35%, up from 15%. Hope is not lost, as the Senate could still shut down the proposed increase. Mercantile Capital’s Hurn thinks eradicating the tax altogether would be a godsend to small business owners. Investors would be able to endow their capital without the fear of the tax penalty. In turn, more entrepreneurs would be able to attain the cash needed to start their businesses. “My theory is that there’s still a tremendous amount of capital that’s sitting on the sidelines,” he says. “If you believe the future of our economy starts with small business, then you ought to give an extra incentive to invest in that particular sector.”

Encouraging small businesses to create jobs with a possible tax incentive:

For small businesses looking to add jobs, a tax break would be a great benefit. But small businesses aren’t likely to hire a new employee unless they can justify it with additional work. An October survey of 250 small business owners by The Ewing Marion Kauffman Foundation found more than a third said they implemented layoff’s in the past year, only 5% had added jobs, and more than half said their business volume and profits had dissipated.

U.S. Treasury Secretary Tim Geithner and Karen Mills, head of the U.S Small Business Association, hosted the Small Business Financing Forum on Nov. 18 at the U.S. Treasury Department, sustaining a pledge by President Barack Obama when he announced two initiatives to boost lending to small businesses last month.

Under President Obama’s plan, the Treasury would utilize Troubled Asset Relief Program resources to provide low-cost capital to community banks, which they would use for small-business loans. Obama also called for increasing the size limit on SBA loans to help strong small businesses develop as the economy recuperates.

The Treasury Department is working on the final terms of the program, and it could be up and running as early as December. Smaller community banks may be apprehensive about participating in the program because of current conditions. In order to ease lenders reservations, Congress has imposed limitations on recipients of TARP funds, such as restraining executive compensation and giving the government an ownership stake.

To watch the forum in its entirety, visit the link below:

http://www.sba.gov/smallbusinessforum/index.html

Thanks to the American Recovery and Reinvestment Act (ARRA), SBA 504 loan rates were very favorable in October with a rate of 3.92% (compared to 5.63% in October 2008). With rates this low, many small business owners decided to take advantage of the SBA 504 loan program to improve their operations. In October, Bay Colony Development Corp. proudly funded the following projects:

• A textile products company in Leominster, MA received a loan to purchase a 76,000 sq. ft. facility for $2.3 million. By embarking on this new project, they were able to retain 23 jobs with the possibility of creating more in the future with the expansion.
• A seafood company in New Bedford, MA, which prides itself on harvesting completely sustainable and all natural seafood, purchased an 11,575 sq. ft. industrial condo for $830,000. With the purchase of the new facility the company estimates it will create 59 new jobs over the next two years.
• A scallop fishing company based in New Bedford, MA, purchased a 24,175 sq. ft industrial condo for $1.5 million.

With the rates remaining historically low, it’s still a great time to explore the possibility of expanding your business. Bay Colony Development Corp. has been a leading provider of the SBA 504 financing since 1981 and is one of the oldest and most experienced CDC’s in the country. In New England, 98% of businesses meet the basic eligibility requirements for the SBA 504 Loan. Interested in the SBA 504 Loan Program? Check your eligibility here or apply online.