Who is PERC?
The Pittsfield Economic Revitalization Corporation is a non-profit organization that provides assistance to small businesses. Formed as a community development corporation in 1982, PERC is a small business resource for economic development in Pittsfield and Berkshire County. The PERC Board of Directors includes people with small business management and financial experience who can provide helpful guidance to applicants.
Am I eligible for assistance from your programs?
Some of PERC’s loan and technical assistance programs are only available to existing or proposed businesses located within the City of Pittsfield. These programs are funded by the City of Pittsfield’s Community Development Block Grant for the benefit of low-to-moderate income people in Pittsfield. This may be accomplished in two ways: a business may commit to create jobs, if at least half of them are provided to low-to-moderate income people, or assistance may be provided to a microenterprise that is owned or started by a low-to-moderate income Pittsfield resident.
Other programs from state and other sources of funding are available to any business within Berkshire County that is growing and creating jobs.
What is a microenterprise?
A microenterprise is a business with five or fewer employees, one or more of whom is the owner. Examples are an individual who is self-employed or a “Mom & Pop” business. A small service, manufacturing, distribution or retail business may also be a microenterprise, whether it always remains small or eventually grows into a larger business.
Is a PERC loan better than a bank loan?
It is not a question of which is better. Businesses apply to PERC when the bank loan does not fully meet their needs. A PERC loan is not a replacement to bank financing; it is a supplement to bank financing when the bank is unable to lend all that is needed.
What kind of business loans does PERC make?
PERC makes term loans to for-profit businesses for business purposes, such as inventory, equipment and working capital.
What are the lending limits?
PERC makes loans up to $100,000 as long as it does not exceed 40% of the project financing. Bank financing or funding from another public agency is needed to match PERC lending.
What is the interest rate?
The interest rate usually matches the bank rate set by the primary lender. It is usually fixed for the full term of the loan, although it may be stepped up during the term. A period of interest-only payments is often included for start-up businesses.
Are there fees?
PERC has a modest application fee of $25. Two points (2% of the loan amount) are charged as an origination fee at the time of loan closing. The borrower is also responsible for PERC’s legal expenses. There are no fees for technical assistance program applications.
Do I need to have collateral?
Yes, some form of collateral to the loan is required. PERC is in a secondary position to the primary lender. In addition to a personal guarantee of the owner, business assets are pledged. In addition, a mortgage is given when the business owns real estate. In most cases, the owner’s residence is also mortgaged to PERC.
What if I do not create the jobs I expected to create?
A borrower that is not a microenterprise will have a two year window within which to create the jobs required to meet the Community Development Block Grant (CDBG) regulations. The jobs created must be jobs that do not require advanced education or special skills. The job creation requirement cannot be waived.
If I don’t qualify for your programs, where else can I get help for my business?
PERC can help you make connections to other state and regional funding sources that are active in making business loans.
Are there other ways PERC can help my business other than a business loan?
PERC has technical assistance programs that can help you improve the management of your business and/or assist with its expansion.
What if my business is just at the idea stage?
PERC can direct you to business development counseling services and act as a sounding board for your ideas so you will have a good idea of the next steps to take.
Who can help me with my business plan?
Only you can develop the plan for your business, but PERC can give you direction to the resources you will need to do the necessary research and know what information to include.
Do I need a business plan if I am an established business?
PERC will need enough information to understand your business. We will need a summary of the business and an explanation of why you need the financing. In addition, PERC will need to see past financial statements and financial projections with a description of how the loan proceeds will be used.
Can I get a business loan if I don’t have a credit history or if I have a bad credit history?
Maybe. PERC will consider your individual circumstances and your ability and commitment to repay the loan. Your credit history demonstrates how you have dealt with debt in the past and it will be a strong indicator of how you may deal with debt in the future, but it will not be the only factor weighed.
Do I have to pay this money back?
Yes. Loan repayment is used by PERC to replenish the loan fund so that more funds can be lent to other businesses.
What if my business fails?
You will be personally responsible to repay the loan.
How do I start the process?
You should set up a meeting with PERC staff to discuss the programs and what will work best for your business. Before you submit the application, you will need to have a commitment for the primary financing or a good idea of where you will obtain it.
Where do I drop off my application?
Please contact PERC staff so that we know when to expect your application. We are available to review a draft application before it is completed and submitted or to answer any questions about the application form.
How long does the process take?
When a completed application is submitted to PERC, staff prepares a summary analysis and sets up a meeting with the review committee. The committee reviews the application in detail and makes a recommendation to the PERC Board of Directors, which takes a vote at its next meeting. If the applicant is well prepared, the process can take as little as 30 days.
Who reviews my application?
Loan applications are reviewed by the PERC Finance Committee; technical assistance grant applications are reviewed by the PERC Technical Assistance Committee. Applicants attend the committee meeting to explain the business and why the funding is needed. The committees make recommendations to the eleven-member Board of Directors, which makes the final decision.
If my application is denied, can I reapply in the future?
Applicants may reapply if there is a material change in the business or financing structure that resolves the concerns of the committee.