Two million dollars will be available to organizations that lend to New Jersey small and micro businesses through the New Jersey Economic Development Authority’s new micro lender support program, announced March 10.
The funds will help eligible businesses cover the costs of scaling up their operations and offering direct assistance to New Jersey-based businesses. The NJEDA anticipates launching the application on April 19.
The NJEDA has provided more than $250 million in support for small businesses and communities that have faced economic hardship throughout the last year. A total of $11.25 million has been provided in support to New Jersey-based Community Development Financial Institutions that finance underserved markets and populations, including a $10 million allocation for the CDFI Loan Loss Reserve Fund and $1.25 million in grant funding through the CDFI Emergency Assistance Grant Program.
These programs have enabled New Jersey-based CDFIs to provide more than $8 million in financing to 349 small and micro businesses. The pilot program approved March 10 provides additional funding.
“Small businesses are the bedrock of communities, and Governor Murphy has prioritized supporting those businesses that have been hit the hardest by the COVID-19 pandemic. CDFIs and other lenders that specifically support micro businesses have been crucial to helping these businesses keep the lights on, but the ongoing challenges of the pandemic have strained these organizations,” said NJEDA Chief Executive Officer Tim Sullivan in a prepared statement. “The Micro Lender Support Grant Program will provide much needed resources to help CDFIs and other lenders continue supporting small businesses that need help while increasing their capacity to serve even more businesses in need.”
CDFIs have provided critical support for businesses struggling with the economic impact of the COVID-19 pandemic. However,
The unprecedented need for support brought on by the pandemic has caused many of New Jersey’s CDFIs to face operational challenges and capacity limitations.
Through the Micro Lender Support Grant Program, grants of up to $200,000 will be available to CDFIs, Minority Depository Institutions, and other eligible lenders as identified in the Economic Recovery Act. Grants received through the program can be used to fund operating costs and the buying down of interest rates of loans offered to micro businesses.
Non-New Jersey-based CDFIs and MDIs that service New Jersey businesses will be eligible to receive funds as well.