The New Jersey Economic Development Authority announced recently it has launched a new pilot program to support small business growth.
The program aims to make capital available to organizations that provide loans to microenterprises and other small businesses that don’t qualify yet for traditional bank financing.
Under the Community Development Financial Institution initiative, the EDA will provide up to $15 million to CDFIs so they can provide more financing to New Jersey small businesses.
Applications for the program are expected to be available in September.
Financing through the CDFI Initiative is made available two ways:
- Loans to Lenders: the NJEDA will provide direct loans of up to $1.5 million to experienced CDFIs to administer term loans or lines or credit to qualified businesses;
- Premier CDFI Program: the NJEDA will provide up to $500,000 on CDFI term loans or working capital lines of credit for qualified businesses.
“Building a stronger and fairer economy starts with connecting small businesses with the resources they need to grow and expand,” NJEDA CEO Tim Sullivan said. “CDFIs provide an important function of lending to small businesses that are not yet ready for bank financing, and the CDFI Initiative will enhance the ability of CDFIs to provide micro-enterprises and main street small businesses with capital they need to grow into thriving enterprises.”
The NJEDA said the program is a direct result of feedback received from organizations that support small businesses in the state.
“One of the most common challenges we at the NJEDA hear from business owners is that there are not enough resources for businesses that are looking to expand but are not able to qualify for financing from traditional banks,” Christina Fuentes, director of small business services, NJEDA, said. “The CDFI Initiative fills an important gap and will play a crucial role in helping community-based lending organizations make the necessary investments into small businesses so they can grow and prosper.”