Govt expends more than $1M for small business loan program

The CNMI government has expended $1 million in funding for small businesses in the current quarter.

The CNMI Department of Commerce, through the Commonwealth Development Authority, has deployed the funds as part of the U.S. Department of the Treasury’s State Small Business Credit Initiative, a statement from the Governor’s Office said.

According to the statement, the funds were used “to attract private lending and investment in small businesses, often by partnering with local financial institutions.”

“We’ve had success working with private lenders and investors to deploy these funds for the benefit of CNMI entrepreneurs and small business owners,” said Commerce Secretary Mark O. Rabauliman.

Rabauliman is also the allottee of the U.S. Treasury SSBCI funds.

“Through these funds we’ve helped small businesses hire new workers, expand their operations and continue to be the engine that drives our state’s economy,” he said.

According to the official, the funding resulted in 42 new jobs and $2.2 million in private investment.

Commerce has an additional $12.5 million that it will continue to deploy to help small businesses obtain the capital and investment needed to grow, Rabauliman said.

Second tranche

Rabauliman also clarified the U.S. Treasury’s decision on the second tranche of funds for the CNMI.

“While we continue to work hard to deploy 80 percent of the first $4 million tranche as originally set forth for June 30, we are pleased that the U.S. Treasury, during our last SSBCI Conference, decided on the modified language,” he said.

He said if a participating state has not qualified for its second disbursement by June 30, 2015, the U.S. Treasury “will terminate the availability of un-transferred allocated funds if the participating state has not expended, obligated or transferred any of its allocated funds during the six months preceding June 30, 2015.”

“What the modified language means is that the CNMI SSBCI program is qualified to apply for its second tranche of $4 million after deploying 80 percent of the first tranche even after the set date of June 30 because we have demonstrated funds deployment of more than $1 million before and during the past six months. We will continue to do so. We also have loans in the pipeline with our participating banks, and we expect to fulfill the 80 percent requirement sooner than anticipated,” Rabauliman said.

The SSBCI was created when President Obama signed into law the Small Business Jobs Act of 2010 on Sept. 27, 2010. Through SSBCI, the U.S. Department of the Treasury awarded $1.5 billion to fund state economic development programs that support small businesses and small manufacturers.

The SSBCI program, introduced to the CNMI in 2012, allocated $13.2 million to the CNMI to be used for small business loans.

The allocation is divided into three tranches and the first tranche is set to expire this June.

Press secretary Ivan Blanco earlier said the CNMI was able to expend “a little over 20 percent” of the first $4 million.

Invitation for small firms

The CNMI’s SSBCI funding is distributed through the CDA’s Collateral Support and Loan Purchase lending programs.

The programs are designed to help small businesses with 750 or fewer employees obtain loans from their local banks for working capital, inventory, real estate or equipment purchases, or lines of credit, including construction loans for qualified projects.

“I encourage entrepreneurs and existing business owners to take advantage of the SSBCI program. That business venture you have been considering but don’t have the capital? That’s where this program comes in. Come in and see us,” said Manny Sablan, executive director of CDA.