CDA hopes to secure fresh SBA funds

The Commonwealth Development Authority is confident the United States Small Business Administration will approve its request for fresh funds that will replenish its depleting portfolio for small-scale investors in the Northern Marianas.

Executive Director Marylou S. Ada disclosed CDA is approaching near to the sealing of another agreement with the Guam-based SBA for at least $700,000 in additional funds that will be earmarked for local applicants wishing to put up or expand small-scale investments.

Ms. Ada 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 if SBA would release the requested additional funding.

“It won’t be taking that long unlike our initial application to institute the Microloan Program here in the CNMI when we had to convince them and submit our books. Now, it’s only a one-page letter of application for supplemental funds,” she told reporters yesterday.

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.

“There is a big demand from people who are asking for loans from CDA either to start-up a business or for their existing investments needing additional capital to keep afloat especially during hard economic times,” she said.

The government’s lending arm is now processing 15 Microloan applications from local entrepreneurs, while more applications are anticipated to come in the next few weeks, amid the program’s already depleted coffers.

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.

The Microloan Program, a partnership between CDA and the SBA, was established to help small businesses cope with economic difficulties. SBA loaned some $300,000 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.

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.