LAWRENCE, Mass.–An economic development fund here in which credit unions are participants is expanding.
Launched in 2015 with $1 million to be used in investing in economic development and job growth in this city's downtown by helping small businesses, the Lawrence Venture Fund is now more than doubling in size to $2.5 million with the assistance of six new banks and credit union participants.
The Lawrence Venture Fund was the first program implemented by the Lawrence Partnership, which was founded two years ago to promote economic development and improve the quality of life in Lawrence. The initial $1 million in the venture fund was provided by four contributors – Eastern Bank, Enterprise Bank, TD Bank and the Merrimack Valley Federal Credit Union – each of whom committed $250,000. The city of Lawrence contributed $100,000 to serve as a loan loss reserve fund should a loan go into default.
According to the Fund, it has now made loans to seven businesses for nearly $500,000, including a bakery, retail shop, auto mechanic, demolition company, transportation company and bodega. Venture Fund loans are given in amounts up to $100,000 and must be paid back within five years, with interest rates between 5% and 8%.
This year Align Credit Union, Digital Federal Credit Union, and Jeanne D'Arc Credit Union, as well as Pentucket Bank, Reading Cooperative Bank and The Savings Bank have all joined the effort.