Maryland Small Business Development Financing Authority

woman at the Business Loan office in Maryland

MSBDFA strives to fortify and amplify the presence of all Maryland-based small businesses, placing special emphasis on enterprises operated by socially and economically disadvantaged businesspersons.

It facilitates a wide array of usages, spanning from working capital, acquisition of materials and equipment, and real estate purchases, to enhancements in leaseholds.

Additionally, it extends its support for purchasing established businesses or financing contracts primarily funded by federal, state, and local governments, or regulated utilities. Surety, payment, and performance bonds are also accessible through MSBDFA.

Recent Boost in Funding

Thanks to the U.S. Treasury’s endorsement, Maryland has the green light to manage up to $198 million in federal aid, including subsequent performance-based allocations, through the State Small Business Credit Initiative (SSBCI).

Among the business lending programs to benefit from this, MSBDFA received a commendable $45 million. A full list of Maryland SSBCI programs is accessible here.

Advantages of MSBDFA

The private sector administers MSBDFA components, while the Maryland Department of Commerce sanctions financing for qualifying enterprises. Here are the pivotal programs under its purview:

  • Contract Financing Program;
  • Equity Participation Program;
  • Long-Term Guarantee Program;
  • State Small Business Credit Initiative;
  • Surety Bonding Program.

Eligibility Criteria

MSBDFA extends its offerings to all small businesses that face challenges securing adequate business financing through traditional channels.

Application Process

Prospective applicants are urged to peruse the Meridian Management Group website for comprehensive MSBDFA guidelines and frequently posed queries before initiating the application process. The online application is the starting point for seeking funding.

  • Note: A prior account registration is mandatory before proceeding with the application.

For any query or assistance related to the application, reach out to:

Robin Harris, Meridian Management Group, Inc. at [email protected] or 410-333-4270, ext. 329.

State’s Electronic Funds Transfer (EFT) Program

Maryland mandates that all contractors register to obtain state payments via EFT before sanctioning any contract surpassing $200,000 by the Maryland Board of Public Works.

Diverse Business Sectors Benefiting from MSBDFA

woman in a business district near a Small Business Loan center

Maryland, with its strategic location and diverse economy, has several thriving sectors. With the aid provided by MSBDFA, certain sectors have experienced significant growth and expansion. These sectors include:

  • Healthcare: With renowned institutions and a growing aging population, Maryland’s healthcare sector is a key beneficiary of MSBDFA. Many small clinics, research facilities, and elderly care centers have availed financing to enhance their services;
  • Technology: Maryland’s proximity to Washington, D.C. and various defense and tech hubs makes it a fertile ground for tech start-ups and IT service providers. Through MSBDFA, numerous tech firms have accessed the capital they need for research, development, and market penetration;
  • Tourism and Hospitality: Renowned for its scenic beauty, historical sites, and coastal charm, Maryland’s tourism and hospitality sector has seen several boutique hotels, resorts, and travel agencies leverage MSBDFA loans for growth and offer better experiences to visitors.

Comparative Table: Key Features of MSBDFA Programs

ProgramPrimary BenefitMax. Loan AmountInterest RateTypical Duration
Contract Financing ProgramFinancing for contractsVaries based on contractCompetitiveContract Tenure
Equity Participation ProgramCapital in exchange for equityUp to $500,000Equity-based5-7 years
Long-Term Guarantee ProgramGuarantees for bank loansUp to $2 millionBased on bank ratesUp to 10 years
State Small Business Credit InitiativeState-backed credit supportVariesMarket RateVaries
Surety Bonding ProgramAssists in obtaining bondsBased on bond valueBond Fee-basedBond Tenure

Need for Business Loans in Maryland

Securing capital is quintessential for business growth and expansion. Insufficient capital remains a primary reason many businesses can’t achieve their growth targets. Securing financing for nascent businesses is arduous, primarily due to unestablished credit history and lack of operational experience.

Maryland Capital Enterprises (MCE) emerges as a savior, extending funds to budding and micro-businesses aspiring to launch or expand their ventures.

Recognized as the solitary micro-enterprise entity in Maryland with certifications from SBA, and USDA, and as a CDFI Intermediary Lender, MCE’s operational costs are catered to by state and federal grants, private donations, foundation allocations, and fundraising initiatives.

Historically, MCE has aided over 6,500 businesspersons, trained almost 5,000 individuals, assisted in 500+ business launches or expansions, helped retain or create more than 1,200 positions and granted loans exceeding $18 million to small business owners up to 2021.

Conclusion

Maryland’s commitment to bolstering its small business landscape is evident through its comprehensive offerings via the Maryland Small Business Development Financing Authority (MSBDFA).

By catering to a diverse range of sectors, from healthcare and technology to green businesses, the state showcases a forward-thinking approach that prioritizes both economic growth and sustainable development.

The various programs under MSBDFA, each designed with unique features and benefits, provide businesses with tailored solutions that address their specific needs, ensuring flexibility and adaptability. As Maryland continues to flourish as a business-friendly state, MSBDFA remains a cornerstone, empowering entrepreneurs and fostering innovation.

For businesses seeking to establish, expand, or innovate within Maryland, the support and resources provided by MSBDFA and its associated entities offer an invaluable lifeline to success.