2008 Brings New Resources from the EDA
The EDA will have two new instruments in its toolbox of funding resources in 2008. URBAN PLUS encourages urban economic development, while Fast Start for small business advances small business growth in New Jersey.
URBAN PLUS has been designed to satisfy a need for financing medium-sized projects in nine key urban centers of the State by providing low-interest loans up to $3 million. The municipalities of Atlantic City, Camden, East Orange, Elizabeth, Jersey City, Newark, New Brunswick, Paterson and Trenton have been identified as key areas in which the Urban Plus program will be deployed to bring about visible, substantive revitalization, employment creation, and increased access to capital. Expanding on the resources available under the New Jersey Urban Fund, Urban Plus loans can be made for as long as 10 years with up to a 25-year amortization and can fund up to 50 percent of total project costs. Projects must have the support of the municipality and must create or maintain jobs, increase ratables, or leverage public financing by a ratio of 1:1.
The EDA Board authorized its first URBAN PLUS loan on January 8 when Maksin Insurance Company was approved for a $3-million loan to purchase the Ferry Terminal Building in Camden. Maksin plans to relocate 85 employees from Pennsauken and create an additional 50 jobs over the next two years as it makes the waterfront building its new corporate headquarters. It is expected that this relocation will act as a catalyst to encourage other businesses to move to the city.
The development of URBAN PLUS complements other EDA-administered programs, including the Local Development Financing Fund, which provides up to $2 million per project in an urban center, and the Fund for Community Economic Development, which provides a maximum of $750,000 for community development projects in urban areas.
Fast Start for small business offers financing up to $300,000 for fixed assets including buildings and equipment, to credit-worthy companies that have operated in New Jersey for at least one year. Underwriting criteria used to evaluate loan applications include the applicant's financial history, lien positions, real estate market value, and the guarantor's credit score.
Prospective borrowers benefit from a true FastStart, thanks to an expedited review and approval process that can shorten the time between application and closing. They also have the option of choosing a fixed rate indexed to the five-year Treasury rate or a variable rate indexed to the Prime Rate.
The creation of Fast Start for small business complements the EDA's recent changes to increase exposure on its existing direct loan and guarantee programs. Maximum limits were raised to $1.25 million for fixed asset loans and $750,000 for working capital loans, as well as to $1.5 million for either fixed asset loan and working capital loan guarantees.
The EDA expects each program to have an immediate positive impact on urban redevelopment and small business growth in New Jersey. Both products were created to support key elements of Governor Jon S. Corzine's comprehensive Economic Growth Strategy that is designed to re-energize New Jersey's cities and nurture the growth of small businesses, particularly those owned by women and minorities.
For more information on the products and services of the EDA, visit www.njeda.com
or call (609) 777-4898.