The state Economic Development Authority will get an extra $33.8 million in federal funding to assist small businesses, Gov. Chris Christie announced Wednesday, but at least one advocacy group says its businesses aren’t looking to borrow.
The money is to be provided under by the federal Treasury Department’s State Small Business Credit Initiative, or SSBCI. It will be used for loans, credit guarantees, loan participations and a venture capital investment, Christie said in an announcement.
The $1.5 billion SSBCI was created under the Small Business Jobs Act of 2010, and aims to strengthen state programs that support lending to small businesses and manufacturers.
But 92 percent of businesses surveyed by the National Federation of Independent Business reported all their credit needs were met, or that they were not interested in borrowing, according to the advocacy group.
“The state’s economic climate will improve when regulatory and tax policies from Washington promote growth and hiring,” said Laurie Ehlbeck, NFIB’s New Jersey director. “But we support any program that encourages entrepreneurship and business expansion in New Jersey, especially among small businesses.”
Another organization also welcomed the program.
“Assistance like this (is) helpful, especially in an environment where many businesses, particularly small firms and startup, still have trouble getting credit,” said Philip Kirschner, president of the New Jersey Business & Industry Association and a former EDA commissioner. “It’s another source for loans and guarantees that can help incentivize banks to make loans. Similar programs have been very successful in the past.”
The federal funds will be received by New Jersey’s Treasury over a two-year period, according to Christie. The EDA will disburse the funds, targeting small businesses and manufacturers, as well as woman- and minority-owned enterprises, “with a particular focus on businesses that are located in underserved communities throughout New Jersey,” according to the announcement.