A Source of Capital for Small Businesses Marks Milestone: NJEDA Loan Pool for Business Program Completes 500th Financing.

TRENTON, N.J.--(BUSINESS WIRE)--Nov. 23, 1999--

A 50-year old printing house in Belleville is the 500th business to receive financing through a creative program crafted by the New Jersey Economic Development Authority (NJEDA) to make it easier for small and mid-size companies to borrow money.

Wheal Grace Corporation, which uses its trademark "Green Print" process, an environmentally sound printing method, received a $587,500 loan that will enable the company to reduce fixed overhead costs and redesign its manufacturing space for more efficient operation and to create growth capacity.

The loan was provided jointly by the NJEDA and the Bank of New York of West Paterson under the Statewide Loan Pool for Business program.

"The NJEDA initiated the program during late 1991 at the peak of the last recession to enable banks to make business loans in a difficult economy. Since then, it has continued to be a means to encourage bank lending to the small to mid-size business sector," said Anthony R. Coscia, NJEDA chairman.

"The principle is that by participating in a loan with the bank, the NJEDA reduces bank risk and makes lending to small and mid-size businesses in New Jersey more attractive," the NJEDA chairman said. "The structure creates a win-win situation for everyone: the business gets the money it needs to expand, the bank has a stronger credit and the State gets a growing economic base from the new jobs and ratables that are created."

The Statewide Loan Pool financing has been made in every county in the state. In total, the NJEDA and the 78 banks that participate in the program have provided $300 million in financing assistance for business projects and not-for-profit groups that generated an estimated 7,300 new jobs. With other resources, the Loan Pool program has resulted in $376 million in new investments in New Jersey.

Caren S. Franzini, NJEDA executive director, noted that when the program was initiated eight years ago with about a dozen banks, it had a modest goal of providing $30 million to businesses that were grappling with a tightened credit market. "We've surpassed our goal by providing 10 times the amount of financing we anticipated. This program has been a tremendous boost for New Jersey's small businesses that are poised to grow. It has opened new avenues to capital and enabled NJEDA to form new banking relationships to benefit the business community. New Jersey's communities and citizens have been the beneficiaries," said Franzini.

The program provides financing from $50,000 to $3 million for small and mid-size businesses and not-for-profit groups. On loans up to $1 million, NJEDA directly can lend up to 25 percent and can guarantee up to 25 percent of the bank portion of the financing. On loans above $1 million, NJEDA can lend up to $250,000 directly and can guarantee up to 30 percent of the bank share.

Of the total $300 million provided to businesses and not-for-profits, NJEDA has directly loaned $63 million while guaranteeing $37 million of the $236 million loaned by banks participating in the program.

Manufacturing businesses comprise one of the largest sectors to which Loan Pool financing has flowed. Other recipients include commercial/retail businesses, distributors/wholesalers, commercial fisheries, construction projects, day care facilities, recyclers, service companies, transportation projects, research and development enterprises, and not-for-profit organizations.

Wheal Grace is an example of a service and manufacturing business benefiting from the program. Of the $587,500 loan, NJEDA provided $147,500 with the balance provided by Bank of New York.

In addition to being able to access bank financing more easily, another Loan Pool benefit is the favorable borrowing rates that result from combining NJEDA financing with bank financing. For example, the EDA loan to Wheal Grace was made at an interest rate of 6.75 percent for a 5-year term with a 20-year amortization.

Wheal Grace was founded in 1946 in Lyndhurst and moved to Belleville in 1993. Its "Green Print" process uses environmentally friendly printing materials like recycled paper, alcohol free printing and vegetable based inks to fulfill customer orders. The company employs 48 workers and anticipates the financing will enable it to add 5 jobs in the next two years.

Emil R. Salvini, owner of the company, said he learned about the NJEDA and its program through his bank. "The agency was easy to approach and the paperwork was easy to fill out. NJEDA worked with our bank and we received the loan on a very timely basis. NJEDA provided a great interest rate. When a business borrows money, the interest rate is everything," said Salvini.

The NJEDA was established in 1974 to build business and create jobs. It has arranged more than $13 billion in financing since its inception. For more information about NJEDA's programs, call 609/292-1800, visit NJEDA's web site at www.njeda.com or send an e-mail to [e-mail].