CDA gets new Microloan funds from SBA

Fresh cash for local business development is expected to flow from the Commonwealth Development Authority after the Guam-based United States Small Business Administration approved the agency’s request for additional funds under the Microloan Program.

Executive Director Marylou S. Ada yesterday disclosed that SBA has okayed CDA’s request for $420,000 in supplemental funding that would facilitate the expansion of the highly-successful Microloan Program launched in the CNMI late last year.

“We are pleased to hear of SBA’s favorable response as our initial funding has already been depleted and we continue to receive Microloan applications,” said Ms. Ada.

She added that the approval for the release of the additional funds would facilitate the growth of the Microloan Program as it will allow the agency to replenish its depleting portfolio for small-scale investors in the Northern Marianas.

She added the government’s premier lending agency is likely to upgrade the maximum amount of money that can be lent out under the Microloan Program from $25,000 to $75,000 now that SBA okayed the release of the requested additional funding.

She explained the initial $350,000 fund earmarked by the SBA for the Commonwealth’s own Microloan Program has already depleted and that more applications are now gathering dust at the CDA office pending the approval and release of the additional $700,000.

Ms. Ada pointed out the Microloan Program has provided a motivation for the local residents to start up a small business of their own, adding that the number of applicants for the program has tremendously increased since its introduction into the island late last year.

The huge turnout in the Microloan Program as well as the pile of pending applications should facilitate the approval of CDA’s request for additional funding from the United States Small Business Administration.

Over $300,000 worth of credit packages have already been approved by the government’s lone lending agency since the Microloan Program was introduced late last year.

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.

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.

The Microloan Program is expected to offshoot the slowdown in lending activities undertaken by private commercial banks due to economic downturn which virtually dampened capabilities by borrowers to repay loans.

At the same time, CDA Board Chair John S. Tenorio said the implementation of the Microloan Program has paved the road for the birth of new businesses to replace those that have closed shop.

According to Mr. Tenorio, the Microloan Program has given a significant number of local entrepreneurs the opportunity to start up their own business through credit packages of up to $25,000.