Overview of the Massachusetts Growth Capital Corporation

This section describes the makeup and responsibilities of the Massachusetts Growth Capital Corporation.

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Massachusetts Growth Capital Corporation (MGCC) was established on October 1, 2010, under Chapter 40W of the Massachusetts General Laws, as an independent quasi-public agency formed by the combination of two preexisting entities: the Massachusetts Community Development Finance Corporation and the Economic Stabilization Trust. Both preexisting entities were quasi-public financing agencies devoted to making nontraditional1 business loans to foster economic growth in the Commonwealth. MGCC has a similar purpose and is a resource for small businesses seeking growth capital.

According to its website, MGCC’s mission is as follows:

Empowering Small Business through financing and managerial assistance to create economic opportunities for all. MGCC provides and supports inclusive business resources to organizations across the Commonwealth.

To accomplish its mission, MGCC works with local banks and lending institutions, community development corporations, and other nonprofit organizations to finance projects that will produce jobs in economically distressed communities throughout the Commonwealth. It also provides loans to organizations that for various reasons cannot obtain financing from traditional sources. Finally, MGCC manages a competitive grant program for community development organizations that provide training and technical assistance to small businesses, including small contractors. MGCC uses its capitalization fund to service the debt it incurs to finance its loans. According to MGCC’s audited financial statements, it receives an annual appropriation from the Commonwealth to fund its grants; the combined total appropriation for fiscal years 2017 and 2018 was $1,750,000.

MGCC is governed by a 12-member board that is chaired by the Secretary of Housing and Economic Development and has a designated seat for the Secretary of Administration and Finance or their designee. The other 10 board members are appointed by the Governor. The board meets five or six times a year to vote on debt financings, loan portfolio reviews, approval of grants, and fiscal decisions and is governed by the organization’s enabling legislation.

MGCC is located at 529 Main Street in Charlestown. According to its organizational chart, as of June 30, 2018, MGCC had 14 full-time employees. Staff members are responsible for underwriting proposed loans, administering the grant program, marketing the loan and grant programs, handling credit and collections, and performing accounting activities. During fiscal years 2017 and 2018, MGCC’s financial position, revenue, and expenses, as reported by its independent accounting firm, included the following selected data.

MGCC’s Assets and Liabilities


Fiscal Year 2017

Fiscal Year 2018

Total Assets



Total Liabilities



Total Net Position




The “Total Assets” category includes loans receivable of $24,572,664 and $22,467,781, net of allowances for uncollectible loan amounts of $2,742,589 and $3,778,835, respectively, for fiscal years 2017 and 2018.

Revenue and expenses during fiscal years 2017 and 2018 were as follows.

MGCC Revenue and Expenses


Fiscal Year 2017

Fiscal Year 2018

Operating Revenue



Operating Expenses



Net Loan Loss (Provision) and Recovery



Non-Operating Revenue



Non-Operating Expenses



Change in Net Position




The table below summarizes the number and total value of the loans and grants MGCC awarded during the audit period, according to MGCC’s audited financial statements and internal records.

MGCC Financial Awards

Type of Award

Number of Awards
July 1, 2016–June 30, 2018

Amount Awarded
July 1, 2016–June 30, 2018

Small Business Loans



Technical Assistance Grants*






*     Technical assistance grants awarded during the audit period included 19 grants, totaling $140,851, that were not included in the audit testing because they were not part of the annual grant award process and were considered to be outside MGCC’s grant program.


The loan portfolio as of June 30, 2017 and June 30, 2018 contained 163 and 119 loans outstanding, respectively. As of June 30, 2018, outstanding loan balances ranged from $248 to $1,000,000, with an average outstanding loan amount of approximately $232,000.

Grant expenses of $4,287,045 and $3,988,806 for fiscal years 2017 and 2018, respectively, included $3,225,000 (in each year) of funds received from the Commonwealth that MGCC transferred to MassVentures, a quasi-public venture capital agency, for the Small Business Innovation Research Matching Grants Program. The funds provided to MassVentures were not included in the scope of our audit.

1.    Nontraditional loans are loans with characteristics that may result in higher risk than typical loan products.

Date published: June 26, 2019