Boost in Access to Resources for Small Businesses in Underserved Communities

Sep 24 2018
SBTAGP Study Press Release

In-depth analysis of state-funded grant program outlines successes and local impact

Press Release

Release Date: Monday, September 24, 2018

Contact: Katie Janowski, kjanowski@massgcc.com / 617.337.2819

 

BOSTON - Today, Massachusetts Growth Capital Corporation (MGCC), Mt. Auburn Associates, Inc. and Karl F. Seidman Consulting Services released a report on the findings of a study examining the effectiveness and impact of the MGCC Small Business Technical Assistance Grant Program.

The study analyzed $5.6 million in grants from FY2014 – FY2018 covering program trends, client outcomes, impacts on the Massachusetts small business ecosystem, best practices, key findings and recommendations.

“The report confirms the tangible results we’ve seen at the local level for several years,” said Larry Andrews, President of MGCC.  “These grants are leveraging talent in key communities across the Commonwealth, helping to grow jobs and management skills.  It’s a great program that we hope to expand in the years ahead.”

MGCC administers the state-funded program, which provides grants and resources to non-profit organizations located throughout Massachusetts to strengthen their capacity to provide technical assistance, access to capital, and training to their local small businesses.  The competitive grants range from $10,000 - $120,000 and focus on individual and partnership organizations in rural regions, Gateway Cities and underserved communities.

“Thanks to the funding from the Commonwealth, many underserved small business owners now have better access to culturally, linguistically, and free business assistance offered by their local organizations.” said Nam Pham, Assistant Secretary for Business Development & International Trade.

The study evaluated 27 grantees out of 38 organizations funded, serving over 5,736 small businesses over the five years reviewed. The report also included findings from a survey conducted with 280 Massachusetts small businesses assisted by the program over the past five years. The employment impact on existing businesses was significant as owners added to the local economies 2,854 jobs and retained 4,862 jobs.  There were over 4,300 positive outcomes including the creation of new businesses, expansions and stabilizations.  Accomplishments were also achieved in community revitalization as over half of the surveyed small businesses either reused an abandoned or vacant building, or made improvements to their buildings and its surroundings.

“This program funding is integral to Community Development Corporations and other non-profit business development providers who are instrumental in strengthening small business resources, making these opportunities more accessible and sustaining the economic vitality of Massachusetts’ communities,” said Joe Kriesberg, President of the Massachusetts Association of Community Development Corporations.

Among the Report’s Key Findings & Recommendations for the Small Business Technical Assistance Grant Program:

  • The Program is an important part of Massachusetts’ small business development system as it expands local capacity to serve small enterprises, particularly underserved populations and communities, and is a cost-effective state policy tool to generate business and to assist with job creation and retention.
  • 89% of businesses served are in the target population: underserved entrepreneurs with barriers to business ownership and capital.
  • Over 1,200 small businesses secured loans that totaled $105.7 million from FY2014-FY2017. 
  • At least one in five clients (23%) assisted through the grant program were able to obtain a loan. 
  • Grantees site tangible benefits from this assistance such as increased visibility for their program, access to new services and loan sources for their clients, improved staff underwriting skills, and improvement to services and processes.
  • Further success could be achieved by developing sector-based and industry specialized technical assistance (i.e. hospitality, agriculture related businesses, etc.).
  • MGCC should work to sustain the grant program and enhance its impact by diversifying and expanding the level of funds available.

To review the full report and executive summary, please visit:

Executive Summary

Full Report

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About Massachusetts Growth Capital Corporation (MGCC):

MGCC is a quasi-public corporation of the Commonwealth that saves and creates jobs at small businesses, including women, immigrant, veteran and minority owned businesses, by providing financial services and managerial assistance.  MGCC also promotes economic development throughout the state, focusing on Gateway Cities and low to moderate income communities.  MGCC works with traditional financial institutions to make challenging loans bankable, working with community development corporations and other non-profits to provide financing for job-producing projects, and assisting a wide range of small businesses find the growth capital they require.  Since inception, it has served over 7,400 small businesses, positively impacted more than 19,200 jobs with customized working capital financing commitments totaling over $120,000,000.

 

Further Coverage:

State House News Service

Sampan News