CNMI: Kilili Announces $13M for Small Business Credit Initiative

Last Updated on Tuesday, 28 February 2012 12:04 Written by News Release Tuesday, 28 February 2012 10:19

Guam News - Guam News

Washington, D.C. - Congressman Gregorio Kilili Camacho Sablan announced today that the Department of the Treasury has approved the Commonwealth as a ?participating state? in the State Small Business Credit Initiative established by the Small Business Jobs Act of 2010. As a result, the CNMI is now eligible to receive $13,168,350 to use for programs that support lending to small businesses and manufacturers. Every federal dollar is required to leverage $10 of private lending.

?The Small Business Jobs Act of 2010 is one more product of the Democratic 111th Congressthat will be benefiting the Northern Mariana Islands for years to come,? Congressman Sablan said. ?The thirteen million dollars announced today will make it easier for small businesses that want to expand and for entrepreneurs, who want to start a new business, to get access to the capital they need.

?Over the next seven years, $130 million in private capital could be added to our economy as a result of the Small Business Credit Initiative.?

According to the Government Accountability Office, which is responsible for annual audits of the new program, the Commonwealth plans to use $6,168,350 of the funds for the CNMI Loan Purchase Participation Program and the remaining $7,000,000 for the CNMI Collateral Support Program.

Sablan congratulated Secretary Sixto Igisomar, whose Department of Commerce will be responsible for managing the federal funds and encouraging the private lending to small businesses.

The Congressman also recognized and acknowledged the Commonwealth Development Authority Board ofDirectors and Executive Director Manual A. Sablan for the year?s work CDA put in to the successful application.

?CDA?s journeyman work laid the foundation for today?s announcement,? Sablan said.

Sablan has been encouraging the CNMI government to take advantage of the money the Small Business Jobs Act makes available since announcing the Northern Marianas would be allocated $13 million, the same amount as twenty-eight of the U.S. states.

In November 2010, as the deadline for filing a notice of intent approached and learning that the CNMI had not contacted Treasury, Sablan alerted Governor Benigno R. Fitial of the need to let Treasury know the CNMI would participate. In December of that year the Congressman again advised the Governor of the June deadline for filing the actual application.

?With our economy struggling and access to credit a problem for small businesses, I did not want to see the opportunity slip by,? Sablan said.

?The CNMI had the same level of support as half of the U.S. states, yet we probably have the smallest overall economy. So, this credit initiative could have an out-sized positive impact for us.?

Initially, the Governor designated the Commonwealth Development Authority to take the lead on the credit program. After two applications were turned down by Treasury because of doubts about the financial viability of CDA, however, Congressman Sablan recommended that Treasury work with Lt. Governor Eloy Inos on alternative arrangements. That was in November 2011.

As a result, the CNMI Department of Commerce was chosen to be the official applicant for the Northern Marianas $13 million share of the Small Business Credit Initiative; and Treasury announced its approval today.

There are still a number of procedural steps. CNMI and Treasury must sign an Allocation Agreement byMarch 12 and the CNMI must provide an approved Legal Opinion and other required documents.

After that is complete, the first one-third of the federal funds, $4,345,555 will be transferred to the Commonwealth. When 80 percent of that money is used, a second $4 million will be provided.

The CNMI will be required to file quarterly reports on its use of the funds, including how the money is being targeted to low- and moderate-income communities, and minority- and women-owned businesses.

?Our economy has a steep road to recovery,? Congressman Sablan said.

?But I am hopeful that this new initiative, resulting from the Small Business Jobs Act we passed in the Democratic Congress in 2010, will help us begin to revive.?

Source: http://www.pacificnewscenter.com/index.php?option=com_content&view=article&id=21284:cnmi-kilili-announces-13-m-for-small-business-credit-initiative&catid=45:guam-news&Itemid=156

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