$2.5 Million Awarded to Community Development Financial Institutions to Fund Ongoing Recovery
Trenton, NJ (May 6, 2014)– Supporting Governor Christie’s commitment to the recovery of businesses and communities in the aftermath of Superstorm Sandy, the New Jersey Economic Development Authority (EDA) announced the closing of grants to Community Development Financial Institutions (CDFIs) under the Stronger NJ Neighborhood and Community Revitalization (NCR) Program. These microlenders will use the funds to expand their existing programs supporting recovery, extending the EDA’s reach to small businesses in communities across New Jersey.
“CDFIs are playing a critical role in restoring the vitality of small businesses in New Jersey post-Sandy. The grants awarded to these organizations will help to broaden the scope of the EDA’s support to include even more small businesses and microenterprises,” said Michele Brown, EDA Chief Executive Officer. “Our partnership with CDFIs allows us to leverage dollars and ensure we are effective in reaching underserved businesses and communities.”
Through the NCR Program, a total of $2.5 million was allocated to provide CDFIs with grants to fund small business loans in the nine most impacted counties. The five microlenders, which were each approved for a $500,000 grant, include The Intersect Fund Corporation, Cooperative Business Assistance Corporation (CBAC), New Jersey Community Capital (NJCC), Greater Newark Enterprises Corporation (GNEC) and UCEDC. To date, they have provided a total of over 250 loans to impacted businesses in excess of $6 million. Businesses include DJ’s Delights, an Asbury Park deli and catering service that received a loan from NJCC; and Keyport-based Planet Food, which took advantage of UCEDC’s recovery loan program.
The NCR grants build on the EDA’s previous investment of $1 million in loans to NJCC and CBAC immediately following Superstorm Sandy. Additionally, through the Loans to Lenders component of its Fund for Community Economic Development, the EDA makes capital available to financial intermediary organizations that can effectively reach small businesses in local markets, microlenders including CDFIs. These organizations have the ability to offer term loans and lines of credit to microenterprises and small businesses not qualified for traditional bank financing.
CBAC has closed 16 loans totaling over $600,000 to Superstorm Sandy affected businesses since November of 2012. The additional funding from the NJEDA will enable CBAC to assist more businesses in Atlantic and Cape May Counties.
“The funding from the EDA will enable us to assist more businesses in Atlantic and Cape May Counties,” said Harry Stone, Executive Director and Chief Executive Officer, CBAC. “We work closely with business owners throughout the application process to prevent unnecessary delays and expedite funding.”
NJCC’s mission is to transform at-risk communities through strategic investments of capital and knowledge, including flexible financing, technical assistance, and consulting services. Since inception in 1987, NJCC has invested over $328 million into underserved communities across New Jersey, which has created or preserved over 6,500 jobs. The NCR grant proceeds will be used to boost NJCC’s existing disaster lending recovery program, which has already offered more than 40 loans totaling over $1.7 million.
Located in New Brunswick and Newark, the Intersect Fund Corporation provides coaching and microloans, with a focus on low-income, minority- and women-owned businesses throughout New Jersey. The $500,000 NCR grant will fund disaster relief loans at reduced interest rates. Through its existing programs, the Intersect Fund has provided 95 loans to Sandy-impacted businesses totaling $735,000. In April, the EDA Board approved a $500,000 investment through the Loans to Lenders program to further boost the capacity of the organization’s traditional and recovery lending programs.
Formed in 2005, GNEC became a CDFI in 2007, providing financial assistance and training to small businesses in a variety of areas, including financial literacy, and business planning and management across myriad industries. GNEC has provided Technical Assistance training to 3,000 unique individuals and graduated more than 200 entrepreneurs through its long-term training program, including workshops, seminars and one-on-one counseling. To date, GNEC has supported over $2 million in lending both directly with microloans and through participation/referrals with strategic partners. Of the loans provided, 90 percent were to minority-owned enterprises, and
70% of those businesses were located in underserved communities. GNEC benefitted from $500,000 of Loan to Lender funds in 2012. The NCR grant will allow the organization to now offer a financing program expressly dedicated to recovery.
In 2011, the EDA formed a strategic partnership with UCEDC to deepen its reach into underserved communities and provide greater access to resources for aspiring entrepreneurs and small business owners. The organization promotes community economic development by providing businesses with access to start-up capital and other services such as loans, government procurement assistance, and technical support. The NCR grant will supplement UCEDC’s efforts to provide capital to impacted small businesses. To date, 106 loans totaling in excess of $3.6 million have been approved through UCEDC’s existing recovery programs. In addition, UCEDC has provided $3 million in Community Advantage 7a and 504 loans for non-Sandy purposes. In 2012, UCEDC received $500,000 of Loan to Lender funds from the EDA to enhance the capacity of UCEDC’s financing programs.
For more information on the Stronger NJ Business programs, visit www.njeda.com/strongernjbusiness or call the EDA’s Sandy hotline at 1-855-SANDY-BZ (1-855-726-3929). To learn more about opportunities for business growth throughout New Jersey, visit the state’s business portal at www.NewJerseyBusiness.gov.# # #