Needing a way to get financing for Greater Worcester's startups and non-traditional borrowers, Timothy Murray at the Worcester Regional Chamber of Commerce dialed up one of his old contacts from when he was lieutenant governor, who just happened to be a little north of him in the county.
Murray reached out to Roy Nascimento – who former Lt. Gov. Murray knew when Nascrimento was the CEO of the New Bedford Area Chamber of Commerce and had since become the head of North Central Massachusetts Chamber of Commerce.
Since he took over the North County chamber two years ago, Nascimento made it a priority to fully capitalize its North Central Massachusetts Development Corp., which has loaned out $4.3 million to small businesses in North County since 1996, usually in amounts of $50,000 to $150,000 to startups and other companies that had a hard time getting financing from traditional lending institutions.
The partnership between Nascimento's and Murray's chambers enables the development corporation to make loans of $50,000 in Worcester and throughout the 35 communities in South County, giving the Worcester chamber and its affiliates a useful tool for its members while the North County chamber benefits from having a larger pool of potential loan applicants.
"Worcester is a big city … and we are the only Community Development Financial Institution in all of Worcester County," Nascimento said. "There is a big opportunity for us."
Murray said this type of financing is essential to his chamber's "Recruit. Retain. Incubate." mantra, and it made more sense to join Nascrimento's already established corporation, since the two chambers already had a history of working together.
"Why reinvent the wheel?" Murray said. "Collaboration is key, and this is a way for us to offer essential financial services to our members."
The development corporation's agreement to make loans of up to $50,000 to companies that have been turned away by banks and credit unions is essential in Worcester, where minority- and immigrant-owned businesses often don't have the financial track record for traditional lending, Murray said.
"Access to capital is critical to any successful business launch," Murray said.
The development corporation expects to close its first loan to a Worcester business in late January, said Nascimento.
The corporation did the bulk of its lending in the 1990s with a $1-million fund provided by the U.S. Economic Development Administration. After Nascimento joined the chamber, the U.S. Small Business Administration provided $500,000 for additional loans; and the development corporation expects to announce the availability of another loan starting in February to bring its total capitalization to more than $2 million.
The expansion into South Worcester County will grow the organization's impact, he said, after being used by small firms like restaurants, bakeries and breweries in places like Fitchburg.
The Worcester chamber "has those relationships already with businesses in South Worcester County, and they are committed to seeing them work," Nascimento said.