11 small business loans okayed

At least 11 small-scale businesses obtained fresh capital from the Microloan Program instituted by the Commonwealth Development Authority through funding from the United States Small Business Administration.

CDA Board Chair John S. Tenorio said the Microloan Program was launched late last year to help stimulate the Commonwealth’s slumping economy by assisting small businessmen obtain fresh and additional capital for either new or existing businesses.

Still within its first six months, loan application of 11 small businessmen involving close to $200,000 have already been approved and Mr. Tenorio said CDA has already been flooded with numerous applications.

Application for credit under the Microloan Program are concentrated on the service-type investments, majority of which are existing businesses needing additional funding or capital.

Mr. Tenorio said, however, the Development Authority has been sitting with applicants for business counseling where government experts provide entrepreneurs inputs regarding which business types are likely to prosper.

“We spend more time with the applicants before we approve the loan. We sit down with them, informing them about other options they can explore or where they can possibly put their money in,” he added.

“We have been implementing the Microloan Program in full swing already. In three months, we were able to close 11 loans and we are processing more applications,” Mr. Tenorio said.

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.

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.

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.