NEW EDA FASTSTART for small business PRODUCT ENHANCES STATE SUPPORT FOR SMALL-BUSINESS GROWTH
Trenton, N.J. (January 29, 2008) – Credit-worthy companies operating in the state for at least one year may now be eligible for low-interest, fixed-asset financing up to $300,000 through a new product unveiled by the New Jersey Economic Development Authority (EDA). Loan approvals will be based partially on guarantor credit scores and the product will be promoted largely through the EDA’s strong partnership with New Jersey banks.
The new financing program, called FastStart for small business, supports Governor Jon S. Corzine’s Economic Growth Strategy to nurture the growth of small businesses, particularly those owned by women and minorities. Loans and guarantees available with this product are intended to meet real estate or equipment needs.
“Banks have been using credit scores for many years to approve loans under certain dollar thresholds as an efficient way to handle smaller requests while preserving acceptable risk standards,” said EDA Chief Executive Officer Caren S. Franzini. “We have now chosen to follow suit and introduce this new program into our product portfolio to enhance the resources available to support small business growth in New Jersey.”
Other underwriting criteria will also be used to evaluate loan applications, such as the applicant’s financial history, lien positions and real estate market value. Prospective borrowers will also benefit from an expedited review and approval process that can shorten the time between application and closing.
Borrowers of low-interest EDA funding under this program have the option of choosing a fixed rate indexed to the five-year Treasury rate or a variable rate indexed to the Prime Rate. It is anticipated that many of the borrowers for this product will work with their existing banks to enhance their current lending relationship.
The creation of this new product complements action taken by the EDA last fall when it approved significant 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 both fixed asset loan and working capital loan guarantees.
Previous limits were $750,000 and $500,000 for fixed asset and working capital loans, respectively, and $1 million for guarantees. The EDA said its decision to increase its loan and guarantee limits would enable it to be a more meaningful partner to the banking community in financing transactions and help more businesses grow, leading to the creation of more jobs.
To learn more about the FastStart for small business product or other programs and services of the EDA, contact EDA Customer Care at CustomerCare@njeda.com or (609) 777-4898, or contact a local bank representative. For more information about doing business in New Jersey, visit www.NewJerseyBusiness.gov or call (866) 534-7789.
The EDA is an independent, self-sustaining state financing and development agency that works to promote economic growth, job creation and the revitalization of New Jersey’s communities with financing assistance, technical support and entrepreneurial training, and real estate development activities.