TRENTON – New Jersey has been approved by the U.S. Department of Treasury for $33.8 million in funding to encourage small business lending and job creation, the governor’s office reported.
The funding is through the State Small Business Credit Initiative (SSBCI), part of the federal Small Business Jobs Act of 2010.
“Small businesses are the job creating engines of New Jersey’s economy and we’ve made support for small business a top priority through targeted tax cuts, regulatory relief and lending programs,” said Gov. Christie in a release. “This funding being made available through the State Small Business Credit Initiative will strengthen our ongoing efforts to help small businesses succeed and grow in our state and create good paying, lasting jobs for New Jersey families.”
The funds from SSBCI will be received by the New Jersey Department of Treasury in three tranches over two years, based upon at least an 80-percent commitment of the first and then second distributions. Through a Memorandum of Understanding, the New Jersey Economic Development Authority (EDA) will use the funds to deploy loans, credit guarantees and loan participations through its existing small business lending programs, and to make a venture capital investment. Funds will be targeted to small businesses, small manufacturers, and women and minority-owned enterprises, with a particular focus on businesses that are located in underserved communities throughout New Jersey.
In addition, the EDA Board has approved an increase in the funding available through the EDA’s Fund for Community Economic Development (FCED) to support micro lenders, Community Development Financial Institutions and Urban Enterprise Zones that have a successful lending track record in their local communities. Under the “Loan to Lenders” component of the FCED, organizations with a successful EDA history will now be able to qualify for up to $750,000, an increase of $250,000 from what was previously available; new customers may qualify for up to $500,000. The loan term has been extended to up to 15 years, with interest-only payments for up to five years. Previously, terms were available for up to ten years, with interest-only payments for up to three years. Additionally, the use of funds has been expanded to also include lines of credit.