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CDA OK’s 3 loans for small businessmen
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Posted on Feb 07 2000
The Commonwealth Development Authority has closed three loan agreements under a U.S. Small Business Administration-backed program for small businessmen since it was introduced late last year, Board Chair John S. Tenorio said.
The three loan agreements approved by the CDA in a two-month period under the Microloan Program involved over $50,000 in fresh capital for local entrepreneurs.
“We have been implementing the Microloan Program in full swing already. In two months, we were able to close three loans and we are processing more applications,” Mr. Tenorio said.
According to Mr. Tenorio, applicants are also seeking advise from the Development Authority regarding which types of business ventures are likely to yield better results or profitable.
The Microloan Program is expected to ease the slowdown in lending activities undertaken by private commercial banks due to economic downturn which virtually dampened capabilities by borrowers to repay loans.
Mr. Tenorio said requirements in obtaining credit under the Microloan Program is a lot more lenient compared with the standards set by private financial institutions.
The Microloan Program, a partnership between CDA and the SBA, was established to help small businesses cope with economic difficulties. SBA loaned some $330,000 to CDA for the program.
Under the program, small businesses can obtain as much as $25,000 in fresh loans.
CDA is the first microlender in the Western Pacific although talks are already underway for the SBA to extend the program in other Micronesian islands.
Mr. Tenorio said the Microloan Program was intended to help small businesses survive the recession. Small businesses are inclined to be overlooked in the traditional credit markets.
CDA is the only government agency which grants all types of loans to local residents of the Northern Marianas at interest rates lower than what are offered by commercial financial institutions.
