RECOVERY LOAN LOSS RESERVE FUND

Open in new Tab RECOVERY LOAN LOSS RESERVE FUND APPLY HERE The Recovery Loan Loss Reserve Fund (“the Fund”) will offer 50% loan guarantees to qualified Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) that will create or have an existing eligible loan program that meets the necessary requirements per NJEDA and the federal State Small Business Credit Initiative (SSBCI) criteria. Each entity is eligible for an allocation of up to $2.5 million per entity with a performance period to ensure the program is being utilized and to also assess the potential for an increase in allocation. PROGRAM DETAILS ELIGIBILITY GUARANTEE AMOUNT PROGRAM DETAILS This product will allow CDFIs and MDIs to offer an expanded loan product suite to create more robust products that can better serve the entities and small businesses throughout NJ. The creation of the Recovery Loan Loss Reserve Fund (“the Fund”) will provide Community Development Financial Institutions(CDFIs) and Minority Depository Institutions (MDIs) the ability to provide working capital loans by leveraging their own non-federal resources using a one-to-one match. CDFIs/MDIs must register eligible loans with NJEDA within 90 days after the loan closing to receive the loan guarantee of up to 50%.  The loan guarantee will remain throughout the term of the loan in case of a future default allowing the CDFI/MDI to take on more risk and exposure and do more lending.  Each CDFI/MDI awardee will be responsible for SSBCI reporting and compliance and only loans that meet the terms of the NJEDA Master Guarantee Agreement will be eligible under this guarantee. This product will allow these entities to opt in for an allocation up to $2.5 million per entity at time of application. Eligible CDFIs and MDIs will have a performance period to ensure the program is being utilized which may allow for an increase to their allocation. ELIGIBILTY Eligible Applicants All entities must have small and micro business lending experience. The CDFIs and MDIs can be based outside of NJ but must use the funds to service eligible NJ based businesses only. Must be a certified Community Development Finance Institutions (CDFI) by the US Department of Treasury or a Minority Depository Institution (MDI) recognized by FDIC and provide current certification by Department of Treasury or FDIC to support a MDI status. Must be able to demonstrate they have the capacity to create/run a program and attract approve financial assistance (loan program) that meet the defined parameters as stated in the memo. Must provide a current NJ Tax Clearance Certificate Applicant must be in good standing with Department of Labor and Department of Environmental Protection Must complete a legal debarment questionnaire. Must provide an assurance affirming that no principal of the financial institution lender has been convicted of a sex offense against a minor (as such terms are defined in section 111 of the Sex Offender Registration and Notification Act (42 §16911). Eligible Loan Criteria Loan guarantees are only applicable to new or existing lending programs that would include the following features: Loan minimum is $10,000 and maximum is $250,000 Applicants can be for-profit or non-profit entities with commercial business locations within NJ. Loan interest rate cannot exceed 12%, Loan can include deferred payments, moratoriums or interest only for up to 12 months, Loan term cannot exceed 7 years, Collateral and personal guarantees are permissible but not required Minimum global debt service coverage ratio of 1.0 If creating a new program then minimum credit score must be under 650 Loans may be used by the business for operating expenses only.