Needham Bank will tap a statewide pool of state deposits to expand lending to local small businesses after joining the Invest MA program, the bank announced Oct. 27.

The program, administered by the Massachusetts State Treasurer's Office, places state cash deposits with participating banks that commit to increasing small business lending, Banker & Tradesman reported. Up to $500 million is available for deposit across participating institutions statewide, with deposits capped at $15 million per participating bank.

Small businesses and sole proprietorships make up 85% of businesses in Massachusetts, according to state data.

"Small businesses are essential to the strength and vitality of the communities we serve," Joseph Campanelli, Needham Bank president and CEO, said in a statement. He said the bank's participation builds on its commitment to providing local businesses with capital and service to grow and create jobs.

How the program works

Participating banks are expected to offer interest rates 60 basis points below the Massachusetts Municipal Deposit Trust Cash Portfolio Daily Gross Overnight Rate at the time they join, Banker & Tradesman reported. In return, banks commit to boosting small business lending.

The program requires all deposited funds to be insured or collateralized, according to the state. Banks must also hold at least a "satisfactory" rating under both the federal and state Community Reinvestment Acts.

The program is open to a range of borrowers, including community-based, family-owned, veteran-owned and nonprofit organizations across Massachusetts, according to the bank's announcement.

Growth backdrop

Needham Bank had 426 active loans to small businesses as of its second-quarter call reports, Banker & Tradesman reported. The bank also reported total loans increased 44.7% year over year to $6.8 billion.

The enrollment comes amid rapid growth for the Needham-headquartered bank. Total assets reached $7.68 billion in the third quarter of 2026, a 41.18% increase year over year, Banker & Tradesman reported, citing the bank's quarterly earnings. Operating net income rose 48.75% year over year to $23.8 million in the same quarter.

The bank has opened three branches in 2026. Additional details about the Invest MA program are available on the state Treasurer's website.