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This article was prepared for the October 17, 2001 edition of
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For a Sluggish Economy, Cheaper Loans
In the wake of the general economic downturn in the
past year and of the September 11 attack, more relief efforts have
been announced. It just got cheaper, for example, for high tech
companies
to borrow money from the New Jersey Economic Development Authority.
Partly in response to the drop in federal lending rates, the NJEDA
is making across-the-board interest rate cuts in all of its lending
programs. Some loans will drop from five percent to three percent,
the lowest that the NJEDA has ever offered, and some will change from
fixed-rate financing to adjustable financing. (The regular bank prime
rate last week was about 5.5 percent.)
Caren S. Franzini, executive director of the NJEDA, says that
the lower rates, combined with rate reductions by banks in response
to the Federal Reserve, “will enable New Jersey businesses to
obtain financing on the most favorable terms offered in capital
markets
in several decades.” For information call 609-292-1800 or visit
www.njeda.com. The goals for this rate reduction:
To keep cash flowing at affordable rates for new andgrowingbusinesses in high tech fields and urban areas.To encourage banks to participate in NJEDA lendingprograms.To stay competitive with surrounding states.To help the NJEDA be a catalyst for economic growth and jobcreation in the state.”The NJEDA is a mainstay source of capital for urban-basedbusinesses,small and mid-sized businesses, minority and woman owned businesses,and high technology businesses — especially emerging hightechnologycompanies — as well as a lending resource for business projectslocated on brownfield sites reclaimed from environmental damage,”says Anthony Coscia, chairman of the NJEDA. The NJEDA workswith banks to guarantee up to 30 percent of the loan or participateup to 25 percent.”Each of those categories of business are important to the NewJersey economy,” says Coscia, “and the NJEDA is importantto them as a means to obtain financing so that they can expand, createjobs, bring new products to market, and maintain working capitallevelsthat keep them moving forward. We want to be sure they can findaffordablefinancing, and make that financing attractive to them during thecurrentperiod.”Emerging high tech companies can apply for the New Jersey Seed Capitalprogram, which provides from $25,000 to $500,000 for working capitalor fixed assets. Later stage companies can apply to the New JerseyTechnology Funding program, in which the NJEDA guarantees a percentageof the bank loans of from $100,000 to $5 million. Various loans forurban districts — amounts up to $100,000 — also fall in thethree percent category.”As the chief economic development agency in New Jersey, our ratereductions go hand in hand with the moves by the Federal Reserve andby banks that have lowered rates,” says Franzini. “EffectiveOctober 11, we will accept applications for financing at the new,lower rates, subject to adoption of the regulations.” Previousloans will not be renegotiated.Nevertheless, until the changes become effective, borrowers are atrisk that current NJEDA rates will apply to the transactions. Alsoeach loan will continue to be subjected to analysis of factors suchas municipal location, type of industry, investment in new facilities,facility expansion and improvements, employment and job creation,and reclamation of brownfield sites.The NJEDA has issued $312 million in financing assistance to 248projectsso far this year.Top Of PageDisaster LoansMiddlesex County businesses that have been affectedby the World Trade Center disaster may be eligible for federalEconomicInjury Disaster Loans from the U.S. Small Business Administration.To qualify, your business must have used all reasonably availablefunds and be unable to obtain credit to pay for ordinary and necessaryoperating expenses.Call 800-659-2955 or E-mail: njhelps@commerce.state.nj.us or go towww.newjerseycommerce.org/njhelps.So far, Mercer County businesses do not qualify, but are urged insteadto call the New Jersey Business Assistance Hotline, 800-643-6090.At some point in the future, Mercer County might be put in thequalifyingcategory. The qualification depends on a county having at least fivebusinesses that experienced at least a 40 percent gross revenue lossas a direct result of the September 11 attack. Qualifying countiesas of last week are Hudson, Bergen, Union, Passaic, and Middlesex.”These loans were designed to fully compensate eligible businessoperations during the post-disaster recovery,” says LindaGreenstein,the Democratic assemblywoman from Plainsboro. “They will helpto stabilize the business community as the country economicallyrebuildsfrom this crisis.” Travel-related businesses are particularlyat risk.Top Of PageFamily AssistanceIf you wondered how Central Jersey’s social agencieswere able to coordinate their efforts to help all the area victimsof the September 11 tragedy, here’s how it’s working. The United Wayof Greater Mercer County has set up a September 11th CoordinatingCommittee that involves an impressive array of 21 agencies dealingwith crisis response, mental health issues, and other human careneeds.Surely these agencies, which range from the AAMH to Womanspace, andwhich regularly compete for donor funds, have never before workedso closely together.Craig Lafferty, president and CEO of UWGMC, told the agenciesnot to worry about money when they are serving families impacted bythe disaster, that the United Way will help them obtain the financialresources. “We wanted the agencies to be able to focus all theirenergies on addressing the needs emerging from the disaster andcontinueto meet the on-going needs of their current clients.”In Mercer and Middlesex counties, an estimated 115 families have beenaffected by the disaster. Some have received services, others arenot ready to discuss their needs. For 22 families, where jobs werelost, financial assistance has been provided.”One of the biggest challenges facing all agencies today,”says Lafferty, “is finding out just who needs help as a resultof the recent devastation. There’s no complete listing of all thevictims in our area. We’re encouraging everyone who’s seekingassistance— or who knows someone who needs help — to call United Wayat 609-896-1912 or the American Red Cross of Central New Jersey at609-951-8550.”The American Red Cross of Central New Jersey is acting as anadvocate for each victim in our area through their Good Neighborprogram,”says Lafferty, “and they’re doing an incredible job. As otheragencies learn of affected families, they make certain that thefamilieshave been in contact with the American Red Cross; if not, the agencymakes sure the Red Cross reaches out to that family. The Red Crossalso refers people to other agencies as specific needs arediscovered.”Under the Good Neighbor Program, Red Cross staff members andvolunteersvisit or contact families to help families identify their needs. RedCross mental health workers are part of the team. The agency canprovideimmediate direct free financial assistance for mortgage payments,rents, additional living expenses, funeral expenses, or travel costsfor bringing in family members for support.Volunteers can also help families qualify for the National Red CrossCash Grant program, which provides a direct, tax-free financial giftto families who lost a loved one or had a family member injured atthe WTC; this program provides a financial base for several monthswhile the family deals with the emotions of the event and can accessother financial assistance programs.Over the next three to six months, more needs may emerge —behaviorproblems with children, increased incidents of domestic violence,and emotional issues for those who were not directly impacted butwere directly affected, and the Coordinating Committee will monitorthese. “There’s a concern,” Lafferty explains, “that thosepeople who work in lower Manhattan or have a friend or colleaguedirectlyimpacted will be in need of help as well. It’s not uncommon duringtimes of disaster for trauma symptoms to appear months later.”The Salvation Army took a mobile kitchen to Ground Zero on September13, and the UWGMC helped to recruit volunteers for this effort. UWGMCstaff and board members — along with members of the Trenton Rotary— worked shifts to keep the kitchen operating. With NexusPropertiesdonating the use of a North Olden Avenue warehouse, the UMGMC andthe Salvation Army arranged a drop-off center for donated goods.Among the other Coordinating Committee members are Cancer Care,CatholicCharities, Contact, Family & Children’s Services, Family Guidance,Greater Trenton Community Mental Health Center, Hands on Helpers,Interfaith Care Givers, Jewish Family & Children’s Services, MercerCounty Hispanic Association, Mercer County Mental Health, PreventionEducation, Princeton Area Community Foundation, Rescue Mission,SamaritanHospice, St. Francis Medical Center, Trinity Counseling Service, andWomanspace.”We are incredibly impressed by the hard work, determination,and spirit of cooperation demonstrated by agencies providing directservices to those in need of assistance,” says Lafferty.Previous StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
