When Michael French and his brother, Frank, were looking for a bank last year to take their small, growing business – F. E. French Construction, a 14 employee, 10-year-old, full-service excavation and utility contractor – they selected their hometown bank, Belmont Savings Bank.
"It felt like a good fit," said the tall and somewhat imposing French.
And when the 30-somethings applied recently for "a security blanket," an equity loan to allow the company to pay their bills within 30 days and purchase equipment, the French's became the first recipients of an innovative program in which Massachusetts
This past Friday, at French's garage in Waltham near the Belmont line, Massachusetts Treasurer Steven Grossman and Belmont Savings CEO Robert Mahoney presented French with a 'big' check – both physically and monetarily – of $200,000, the very first small business loan secured with state funds that just a few months ago was languishing in a large bank.
The money came from Grossman’s new Small Business Banking Partnership Program where the state places reserve funds into Massachusetts community banks with the understanding that the banks and credit unions will use the deposits to make loans to small, credit-worthy businesses.
“By depositing these funds in a bank like Belmont, we’re putting Massachusetts taxpayer resources to their optimal use, supporting Massachusetts small businesses, and creating more jobs right here at home," said Grossman, who said before the program, the funds were regularly placed in accounts in large US and foreign banks.
Making taxpayers money work
"[The account], Massachusetts taxpayers money, was just sitting there. There had to be a better way to make it working creating jobs and helping our small businesses," said Grossman.
In May, Grossman began placing those funds in community banks such as Belmont Savings with the understanding the deposits would receive the going interest rate, be used to make loans to small businesses and the loans be collateralized.
"Belmont Savings was the ideal bank because I know Bob (Mahoney) as an innovative banker who would run with this," Grossman said.
“We’re thrilled to be able to support our local economy by extending this loan to F.E. French ... ,” said Mahoney.
“We know that small businesses are the anchor of our local economy so we are thrilled to be a part of the Treasurer’s small business partnership program,” he said.
French said the $200,000 will be used to purchase another piece of heavy equipment that will require employing another person or two.
"This will really help," said French.