The New Jersey Economic Development Authority (NJEDA) Board of Directors last week approved the creation of the Micro Lender Support Grant Program. This $2 million pilot program will make grant funding available to organizations that lend to New Jersey small and micro businesses. These funds will help eligible entities by supporting the costs associated with scaling up their operations and offering direct assistance to New Jersey-based businesses. This is critical now as the COVID-19 pandemic has created overwhelming need among micro businesses.
Throughout the COVID-19 pandemic, the NJEDA has provided more than $250 million in support for small businesses and communities that have faced economic hardship. The Authority has provided a total of $11.25 million in support to New Jersey-based Community Development Financial Institutions (CDFIs) that specifically target financing to underserved markets and populations. This includes 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.
To date, these programs have enabled New Jersey-based CDFIs to provide more than $8 million in financing to 349 small and micro businesses throughout the state. The pilot program approved today builds on this success by providing additional funding and expanding the pool of potential partners the NJEDA can partner with going forward.
“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. “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 and persistent need for support over the past year has caused many of these organizations to face operational challenges and capacity limitations.
The Micro Lender Support Grant Program will make an additional $2 million available to provide grants of up to $200,000 to CDFIs, Minority Depository Institutions (MDIs), and other eligible lenders as identified in the Economic Recovery Act. This pilot program is meant to identify and assist eligible partners.
Grant funds received through the program can be used to fund operating expenses associated with servicing micro businesses and the buying down of interest rates of loans offered to micro businesses. CDFIs and MDIs based outside New Jersey that service New Jersey businesses will be eligible to receive funds, which will reduce the financial burden on New Jersey-based CDFIs and create new financing opportunities for New Jersey businesses.
The NJEDA anticipates launching the application for the Micro Lender Support Grant Program on April 19, 2021. Organizations interested in learning more about the program are encouraged to contact firstname.lastname@example.org.