Making loans to help small businesses bound back from Sandy has enabled UCEDC, a statewide, nonprofit economic development corporation, to become the state's leading maker of microloans, a program sponsored by the U.S. Small Business Administration.
Maureen Tinen, president of UCEDC, said during the SBA's fiscal year that ended last Sept. 30, UCEDC made $2 million in loans to 71 small businesses, more than any other New Jersey SBA microlender.
UCEDC reached the SBA's top microloan ranking through its Sandy microloan initiative: the Storm Recovery Loan Program. The program gives small businesses loans of up to $50,000 for five years with a 2 percent interest and no collateral requirement.
Tinen said since UCEDC launched the program in late 2012, it has approved 93 loans totaling $2.5 million. As UCEDC continues to get loan applications, Tinen estimated the nonprofit will make another $2 million in Sandy microloans this year.
In many cases, businesses that suffered from Sandy needed cash because they were not fully covered by insurance, or they were not eligible for state grants, she said.
Tinen said UCEDC is able to provide the loans at 2 percent because the interest rate is subsidized by grants it receives from Investors Bank and the Hurricane Sandy New Jersey Relief Fund.
UCEDC borrows money from the SBA, and then lends the money out as microloans. Any business that suffered either physical or economic damage from Sandy can qualify for a UCEDC microloan, she said.
For example, a tackle shop at the shore lost revenue after Sandy, "because there was a curfew on fishing and they closed down because they could not sell tackle," Tinen said.
Borrowers include a retail store that closed for 10 days because of the power failure; a restaurant that lost all of its produce; a veterinarian that lost its medicine inventory and a trucker "who had one truck that was flooded out, and his insurance didn't cover the cost of buying another truck," she said.