State to support small-biz bonds
The state plans to help small businesses land federal stimulus contracts by backing up their required bond deposits.
Under federal construction-contract laws, companies bidding for projects have to put up a surety bond to ensure that projects get finished.
Some small business owners either can’t raise enough money for bonds or are so desperate that they take out second mortgages on their personal homes.
But Gov. Deval Patrick announced yesterday his administration is now working with the Massachusetts Community Development Finance Corp. to help small minority- and women-owned firms get CDFC guarantees for bonds.
Eligible businesses would be able to get up to $250,000 in bond help, the administration said yesterday.
“Small minority-owned and women-owned businesses are the backbone of our economy,” said Patrick in a statement. “Our collaboration with CDFC relieves what was previously a huge challenge that kept many of these companies from competing for construction projects.”
The administration said the CDFC program was an idea floated during last month’s economic summit hosted by Patrick. The state is still working on plans for a small-business “micro-loan” program for firms, a spokeswoman said.
Article URL: http://www.bostonherald.com/business/general/view.bg?articleid=1210792
Filed under: Economy, Surety Industry, Surety Legislation
