1st Bergen Federal Credit Union Aids COVID-19-Impacted Small Businesses with Support from NJEDA
TRENTON, N.J. (September 3, 2020) – Leveraging the New Jersey Economic Development Authority’s (NJEDA’s) Loan Loss Reserve Fund, 1st Bergen Federal Credit Union (1st Bergen) recently launched an EDA Small Business Loan Program to offer low-interest loans to small business and non-profit customers that have been impacted by the COVID-19 pandemic. The program is the latest step in the Community Development Financial Institution’s (CDFI’s) ongoing mission to provide low-income singles, couples, and families with programs and financial services that help them on their road to self-sustainability.
1st Bergen is one of six CDFIs, and the only credit union, to participate in the CDFI Emergency Loan Loss Reserve Fund, a $10 million capital reserve fund that the NJEDA will use to take a first loss position on CDFIs’ COVID-related loans that provide low-interest working capital to microbusinesses that have been negatively impacted by the outbreak. The NJEDA will back these loans up to 50 percent if they default in the future. This will allow the CDFI partners to increase their capacity and participate in more loans, at flexible terms and lower interest rates.
1st Bergen is leveraging the allocation it received through the Loan Loss Reserve Fund to provide a total of $1 million in support to small businesses and non-profits impacted by the pandemic. The CDFI is offering loans of up to $75,000 with 2.75-percent interest for a term of up to five years. Deferred payments of up to six months are also available
As a credit union, a type of member-owned financial cooperative, 1st Bergen is focused on serving the financial needs of its members rather than making a profit. Credit unions typically provide the same services as traditional banks, often with lower rates and more favorable terms. All credit unions have a limited field of membership, and 1st Bergen’s membership is open to anyone who lives, works, worships, volunteers, attends school or conducts business in Bergen or Ocean counties, Paterson, or Jersey City. Immediate family of current members are also eligible to join 1st Bergen. Applicants to 1st Bergen’s EDA Small Business Loan program must be members of the credit union. 1st Bergen Chief Executive Officer (CEO) Robert Moore noted that membership is free, with a $5 minimum required in a checking account.
“Our focus at 1st Bergen has always been to arm our members with the resources they need to face whatever challenges come their way,” Moore said. “Funding we received from the NJEDA is allowing us to help our customers recover from the tremendous economic strain that COVID-19 has caused them.”
Non-profit CDFI lenders like 1st Bergen are distinguished from other financial institutions by their community development mission and flexibility to determine the best use of limited government and private resources in their community. To be federally designated as a CDFI, a financial institution must certify that at least 60 percent of its financing activities are targeted to low- and moderate-income (LMI) populations or underserved communities.
“Small businesses, and particularly those in underserved communities, have been especially hard-hit by COVID-19,” NJEDA CEO Tim Sullivan said. “Credit unions like 1st Bergen play an integral role in providing businesses and nonprofits in these communities with equitable and inclusive access to the capital they need to successfully re-emerge from the pandemic.”
Established in 2009, 1st Bergen is the financing arm of the non-profit agency Greater Bergen Community Action, which is part of a nationwide network of poverty-fighting enterprises established to address the intractable and persistent problem of poverty in America.
Through a partnership with O.C.E.A.N. Inc. and Greater Bergen Community Action formed in October 2019, 1st Bergen expanded its reach into Ocean County, by opening a branch at O.C.E.A.N. Inc., where it now provides full banking services to its members in Ocean County and caters to individuals who are struggling to build their credit, or are tired of paying exorbitant check cashing fees. O.C.E.A.N. Inc. is a Community Action agency with a mission of providing quality and comprehensive services that improve the quality of life for individuals and families in Ocean County.
Comprehensive information about New Jersey’s coronavirus response is available at https://cv.business.nj.gov.
To read Governor Murphy's full economic plan, please visit: https://nj.gov/economicplan
About the New Jersey Economic Development Authority
The New Jersey Economic Development Authority (NJEDA) serves as the State’s principal agency for driving economic growth. The NJEDA is committed to making New Jersey a national model for inclusive and sustainable economic development by focusing on key strategies to help build strong and dynamic communities, create good jobs for New Jersey residents, and provide pathways to a stronger and fairer economy. Through partnerships with a diverse range of stakeholders, the NJEDA creates and implements initiatives to enhance the economic vitality and quality of life in the State and strengthen New Jersey’s long-term economic competitiveness.
To learn more about NJEDA resources for businesses call NJEDA Customer Care at 609-858-6767 or visit https://www.njeda.com and follow @NewJerseyEDA on Facebook, Twitter, and LinkedIn.