The New Jersey Economic Development Authority announced Thursday that New Jersey Community Development Financial Institutions are now able to apply for funds from its new CDFI Initiative.
The program was developed as part of Gov. Phil Murphy’s plan to build a stronger, fairer economy in the state by supporting small businesses.
The NJEDA has a total of $15 million available for CDFIs for support and expansion efforts, it said.
“Helping a small business succeed provides an immediate, tangible economic impact on a community, which is why building a stronger and fairer economy starts with connecting small businesses to the resources they need to grow,” NJEDA CEO Tim Sullivan said. “CDFIs are crucial to small businesses that are just getting started because they can lend to 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 the capital they need to thrive.”
The CDFI Initiative assists small businesses in two ways:
- The CDFI Loans to Lenders: Provides loans of up to $1.5 million to CDFIs with demonstrated lending and portfolio management history, which the CDFIs will then administer as term loans/lines of credit to qualified New Jersey small businesses;
- The Premier CDFI Program: CDFI’s can apply to the NJEDA for Premier CDFI status, which will allow the CDFI to offer term loans/working capital lines of credit for qualified New Jersey small businesses, with NJEDA participation of up to $500,000.
“The NJEDA frequently hears from small business owners who are ready to expand but may not yet qualify for financing from traditional banks,” Christina Fuentes, director of small business services, NJEDA, said. “The CDFI Initiative will help address this challenge by providing low cost funding to various community-based lending organizations who will then create lending products small business owners can utilize in order to grow and prosper.”