How is NJEDA partnering with CDFIs to support low-cost financing for small businesses and nonprofits impacted by COVID?
On April 17, 2020, the New Jersey Economic Development Authority (NJEDA) announced partnerships with six Community Development Financial Institutions (CDFIs). These partnerships will leverage New Jersey-based CDFIs to provide between $20 million and $30 million in low-cost financing to small and microbusinesses and nonprofits impacted by the COVID-19 outbreak.
New Jersey Community Capital (NJCC), UCEDC, Regional Business Assistance Corporate (RBAC), Cooperative Business Assistance Corporation (CBAC), Greater Newark Enterprise Corporation (GNEC), and 1st Bergen Federal Credit Union will be participating in the Authority’s new CDFI Emergency Loan Loss Reserve Fund, and all but 1st Bergen Federal Credit Union will also take part in the new CDFI Emergency Assistance Grant Program.
The CDFI Emergency Loan Loss Reserve Fund is a $10 million capital reserve fund that the NJEDA will use to take a first loss position on CDFI 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% if they default in the future. This will allow the CDFI partners to increase their capacity and participate in more loans, at flexible term and lower interest rates.
The CDFI Emergency Assistance Grant Program is a $1.25 million program that will provide five CDFIs grants of $250,000. These grants will help the CDFIs scale their operations due to the high demand for assistance from business owners and buy down interest rates on their loans to offer borrowers more flexible loan terms at lower rates to help small and micro businesses survive during this COVID-19 outbreak.
The NJEDA’s role in these programs is to support participating CDFIs. Businesses and nonprofits seeking financing should contact the CDFIs directly.
New Jersey Community Capital’s Garden State Relief Fund
The Garden State Relief Fund offers working capital loans to small businesses and nonprofits negatively impacted by the COVID-19 pandemic.
The Garden State Relief Fund ensures that small businesses and nonprofits are provided with quick yet equitable and inclusive opportunities for relief, stability, and growth. The Fund provides financial support for those that often lack access to conventional capital and have been disproportionally affected by this evolving public health crisis.
- Businesses and nonprofits with 3 to 50 full-time employees. NJCC will aim to process Garden State Relief Fund applications within 10-14 business days.
- Special opportunity for businesses located in the THRIVE South Jersey footprint (Gloucester, Cumberland, Salem, and Western Atlantic Counties), thanks to the generous support of the Pascale Sykes Foundation. Visit the THRIVE South Jersey information page for more information.
- Up to 36 months. See the relief fund info sheet for complete eligibility and terms.