Working capital loans with competitive interest rates and no collateral requirement will support New Jersey small businesses
TRENTON, N.J. (November 28, 2023) – The New Jersey Economic Development Authority (NJEDA) today announced the opening of the NJ Capital Access Fund. The fund will leverage Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) to offer a working capital loan product that will better serve New Jersey-based small businesses. The NJEDA-designated fund manager, Calvert Impact, will utilize and match NJEDA’s $50 million investment with State Small Business Credit Initiative (SSBCI) funding for a $100 million fund that supports a New Jersey loan participation program. The SSBCI funds, matched with raised private capital, will be used to purchase up to 80 percent of every eligible loan by participating community lenders.
“The NJ Capital Access Fund serves as a testament to Governor Phil Murphy’s unwavering commitment to supporting New Jersey small businesses by increasing access to much-needed capital in the wake of the pandemic and recent inflationary pressures,” said NJEDA Chief Executive Officer Tim Sullivan. “This program, which is being administered by Calvert Impact on behalf of the NJEDA, will bolster community lending infrastructure and provide a streamlined path for small businesses in need of loans, helping revitalize a core component of our state’s diverse economy.”
The NJ Capital Access Fund was designed by the NJEDA to meet the needs of small businesses and nonprofits throughout New Jersey and to help serve a larger amount of New Jersey businesses by leveraging a technology platform through the Community Reinvestment Fund, USA. The Capital Access Fund will work alongside six CDFI partners to offer working capital loans up to $250,000 to businesses that have been operating for at least 12 months, with a revenue of $10 million or less and fewer than 50 employees. The loan program will offer flexible features, including no minimum credit score or collateral requirements, terms from 36 to 60 months, low fees to borrowers, and competitive fixed interest rates. Full details, including eligibility requirements and pre-applications, can be found here.
Calvert Impact is a nonprofit organization primarily focused on financing sectors ignored by mainstream capital markets and has been supporting community and economic development organizations for nearly 30 years. With proven experience in the creation of financial products that meet the specific needs of underserved and underbanked communities, Calvert Impact’s work supported over 231,000 small businesses in 2022, which have created or maintained more than 905,000 jobs.
“Small businesses across New Jersey deserve access to capital to support their continued growth,” said Beth Bafford, Calvert Impact’s Vice President of Strategy. “We are excited to partner with NJEDA and our CDFI partners to bring this innovative public-private partnership to New Jersey’s smallest businesses, which are vital to the character of their communities and the vibrancy of their local economies.”
Financing for the NJ Capital Access Fund is allocated from $255 million in federal SSBCI capital allotted to the State of New Jersey by the United States Department of the Treasury. The NJEDA is utilizing the funding to create six programs that provide financial assistance to small and micro businesses in New Jersey. More information on SSBCI-funded programs can be found here.
Article Courtesy of the NJEDA