New Jersey Community Capital Leverages Public and Private Partnerships to Assist Underserved Communities Affected By COVID-19
Under the leadership of NJCC President Wayne Meyer, New Jersey Community Capital has approved $2.57 million in COVID-19 Relief Funding. From left: Michelle E. Richardson, Executive Director of Hudson Economic Development Corporation, Kent Pipes, Founder of the Affordable Homes Group/ Salt & Light Company, and NJCC President Wayne Meyer.
CDFI has Already Approved $2.57 million in COVID-19 Relief Funding
TRENTON, N.J. (June 17, 2020) – New Jersey Community Capital has been taking a holistic approach to neighborhood revitalization and economic development in underserved communities for decades. The Community Development Financial Institution (CDFI)’s comprehensive strategy is now also benefiting small businesses and non-profits impacted by COVID-19. Since the pandemic began, NJCC has approved $2.57 million to nearly five-dozen small businesses and non-profits. More than half of the funds have already disbursed with support from the New Jersey Economic Development Authority (NJEDA).
CDFIs like NJCC support their community in various ways, lend to other smaller-scale CDFIs to allow them to offer loan products within their communities, and support cities and counties with their lending efforts. Non-profit CDFI lenders 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.
NJCC is one of six CDFIs participating in the NJEDA’s CDFI Loan Loss Reserve Fund. This fund allows the NJEDA to partner with New Jersey-based CDFIs that want to offer their own working capital loan product to small businesses affected by the COVID-19 outbreak. Through the program, the NJEDA will take a first-loss position on COVID-19-related loans that provide low-interest working capital to microbusinesses that have been negatively impacted by the outbreak.
Additionally, NJCC is one of five New Jersey-based CDFIs to each receive $250,000 through the NJEDA’s Emergency Grant Program. Through the program, NJEDA is providing the CDFIs with grant funding to help them scale their operations due to the high demand for assistance from business owners. Of the $250,000 provided by the NJEDA, $125,000 will be going to help NJCC cover the $750 loan origination fee on each GSRF loans that is not being collected from borrowers. The other $125,000 from the NJEDA is supporting interest rate buy-down (IRB) during the six-month, no payment period on GSRF loans not covered by other IRB grant funds.
“Creating an equitable and inclusive path to recovery is a fundamental part of our plan to move the state’s economy past the COVID-19 pandemic,” said NJEDA Chief Executive Officer Tim Sullivan. “Through our relationships with CDFIs like NJCC, we are able to amplify the reach of state, federal, and private resources to communities throughout New Jersey.”
NJCC has managed to leverage funding from its partnerships with its bank, impact investing, and philanthropic relationships, to create a $15 million working capital loan fund called the Garden State Relief Fund (GSRF) following the onset of the COVID-19 outbreak. The GSRF provides flexible and quick access to low-interest capital for small businesses and non-profits impacted by the pandemic. Under the program, New Jersey entities with between three and 75 employees are eligible for low-interest loans of between $10,000 and $75,000, with terms of up to 36 months. NJCC has created a simple two-step application process that can be done all online.
To date, NJCC has approved 57 loans totaling approximately $2.57 million in funding (90 percent small businesses and 10 percent non-profits), with more than half of the funding already being distributed. Of these, over 40 percent are women and/or minority-owned businesses.
“NJCC has an extensive history of providing critical capital to underserved communities impacted most during times of economic challenge,” said NJCC President Wayne Meyer. “Through our Garden State Relief Fund, we are striving to provide small businesses and non-profits with quick, fair, and far-reaching opportunities for relief, stability, and growth.”
NJCC’s staff is currently processing over 400 GSRF loan applications.
More than $1 million of the $2.57 million GSRF funding has specifically been approved for entities in Cumberland, Gloucester, Salem, and Western Atlantic counties. NJCC launched its THRIVE South Jersey Initiative in 2016 to deploy flexible, affordable capital and technical assistance within these counties, in order to generate quality jobs and improve economic opportunities. A $1 million NJEDA loan in 2016 was used to boost the $13 million loan fund, supporting small businesses and workforce development programs in the region.
Businesses in the designated THRIVE South Jersey Initiative counties are eligible for zero-percent interest loans through the GSRF thanks to the generous support of the Pascale Sykes Foundation, which focuses on empowering working low-income families, so they can collectively strengthen their relationships, establish stability and reach their dreams.
More information about the Garden State Relief Fund, as well as the application, can be found at https://www.newjerseycommunitycapital.org/initiatives/garden-state-relief-fund or by following @NJCLF on Twitter.
NJCC’s traditional services include revolving loan funds and related investment products, real estate development/foreclosure mitigation, homeownership counseling and mortgage products, capacity building, and technical assistance. Since it was founded in 1987, NJCC has invested over $630 million in New Jersey communities. Actions by the CDFI have also resulted in the creation and/or preservation of 12,000 jobs, the development of 5.7 million square feet of real estate, 10,500 housing units, and educational opportunities for over 25,000 students.
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.