The 7(a) Loan Guaranty Program is the SBA’s primary loan program.  It is also the most flexible since the agency can guarantee financing under the program for a variety of general business purposes.  To qualify for an SBA guaranty, a small business must meet the 7(a) loan guaranty criteria and the lender must certify that it cannot provide funding on reasonable terms except with an SBA guaranty.  The SBA can guarantee as much as 80% on loans up to $100,000 and 75% on most loans up to $1,000,000. 

Use of Proceeds

A start-up or existing business may use the guaranteed loan to:

• Expand or renovate facilities
• Purchase machinery, equipment, furniture, fixtures, leasehold improvement and inventory
• Finance receivables and augment working capital
• Refinance existing debt
• Construct buildings and/or purchase land and buildings, etc.

Eligibility

To be eligible, a business must be operated for profit and not exceed the SBA’s size standards.  Certain types of businesses are not eligible such as those engaged in lending, real estate development, investment or speculation.  Pyramid schemes and gambling or illegal operations are also ineligible.

One Stop Capital Shop

The SBA will soon be opening their One Stop Capital Shop office in Vineland.  In the meantime, if you would like to talk to an SBA representation, please call Don Swartz at 856-459-1700 or email to donald.swartz@sba.gov.

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The Cumberland Empowerment Zone’s tax-exempt facility bonds are proving to be a tremendous draw to the area. One of the benefits of a Round Two designation is that there is no cap on the bond amount to be utilized on any given project. And the picture is getter better! New legislation is sitting on the President’s desk to increase our total bonding capacity from $130,000,000 to $230,000,000. Used as a financing tool, EZ tax-exempt bonds offer significant savings on the cost of capital to the borrower. Savings run approximately 3% to 5% below market rate depending on the size of the bond issue. The Empowerment Zone staff is having several conversations with out-of-state businesses that wish to locate in our area solely because of the EZ Round Two designation and our strategic location in the northeast corridor. In addition to the bonds, the Empowerment Zone offers wage credits for the employees who live in the designated census tracts.

Lime Processing Plant Comes to Bridgeton EZ

Dennis Lawson International, Inc. signed agreements for land purchase and EZ bond financing on October 20. The company wishes to utilize $37 million in EZ bonds. The project plant will process limestone ore as agricultural lime for farmers, hydrated lime for water/sewer treatment plants and lime for the glass industries and generating plants in the South Jersey area. The anticipated start date of the project is February 2001, with completion in approximately 18 months. The new plant will create approximately 200 new jobs. The new job opportunities will be for managers, engineers, administrators, equipment operators, tradesmen, packers and laborers. The principals have indicated that this may also spark the development of additional businesses that would complement the lime processing facility.

Pastridor USA Can’t Beat EZ Bond Financing

Pastridor USA recently had a groundbreaking ceremony in the Vineland Industrial Park. The company is building a 139,000 square foot state-of-the-art bread baking facility. The business will provide 40 new full-time positions within two years of beginning operations. The $19 million project will be funded with a combination Vineland UEZ funds and EZ tax-exempt bonds. The company explored all their financial options discovering that the EZ bonds were the lowest cost of capital.

The Bridgeton Police Department’s Community Policing Unit has formed a partnership with the Cumberland Empowerment Zone as we have similar interests.  The community-policing unit has officers assigned to the EZ areas of the City of Bridgeton and we take our neighborhood assignments seriously.  We care about the people and want to improve the quality of life for our residents.  Our goals are to improve our community and neighborhoods.  No longer do we need to wait for someone to come into our community from out of town to provide the services needed in the community and neighborhoods.  We now are “empowered’ to provide the retail, commercial and community-oriented services that we need.  We can now do it ourselves.  We want to encourage our neighbors to stay and to improve our community, to welcome those new, and work together towards a common goal.

CLOSING THE DIGITAL DIVIDE

On Friday, October 13, 2000, Martin Luther King Academy was the first site that witnessed the partnershp of CEZ, Computer Learning Associates and local community organizations to provide the community with three new computers.

Computer Learning Associates was recently granted $45,000 in CEZ funds to provide up to 100 refurbished computers to non-profit and faith-based organizations located within the Zone over the next three years.  Michael Hennessy of Computer Learning Associates stated that the goal for the first year is 30 computers, with the next identified site being the Bridgeton Housing Authority.  The goal of setting the computers up in the community centers is to provide youth with non-corrupt forms of educational software.

In creating the partnership, Computer Learning Associates agreed to train MLKA staff associated with the PAL program in computer skills.  In turn, MLKA has agreed to avail the computers to community members in the evening hours.

Computer Learning Associates receives $45,000 check from CEZ.

The Earned Income Credit (EIC)

Workers who qualify for the EIC and file a federal tax return can get back some or all of the federal income tax that was taken out of their pay during the year.  They may also get extra cash back from the IRS.  Even workers whose earnings are too small to have paid taxes can get the EIC.  What’s more, the EIC reduces any additional taxes workers may owe.

Who can get the EIC and how much is it worth?  Single or married people who worked full-time or part-time at some point in 1999 can qualify for the EIC, depending on their incomes.

• Workers who were raising one child in their home and had a family income of less than $27,413 in 2000 can get an EIC of up to $2,353.

• Workers who were raising more than one child in their home and had a family income of less than $31,152 in 2000 can get an EIC of up to $3,888.

• Workers who were not raising children in their homes but were between the ages of 25 and 64 on December 31, 2000 and had income below $10,380 can get an EIC of up to $353.

For additional information on EIC, contact Steve Valli at 609-292-4750.

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There has been a great deal of inaccurate information flowing freely throughout the county about the Empowerment Zone designation and what it means.  CEZ would like to take this opportunity to dispel the myths and state the facts.

The Empowerment Zone is restricted to qualified census tracts and designated developable sites.  To be a qualified census tract, the rate of poverty in that tract had to be over 20% and the overall rate of poverty for all qualified census tracts collectively, had to exceed 25%.  There were only five census tracts in the entire county that qualified.  There were three in Bridgeton and two in Vineland, encompassing approximately four square miles, with an overall poverty rate exceeding just over 32%.  Other Urban Empowerment Zones have poverty rates well over 50% in their qualified census tracts and that does not mean the entire city is in dire straits.  Some of the most progressive cities in the country have Empowerment Zones.  The zones are the areas within a city that are plagued with problems and have not equally benefited from the region’s economic growth.  The federal government created these zones to level the playing field and stimulate economic development and community sustainability.

Only 15 Round Two Empowerment Zone designations were awarded in the fierce competition.  Cumberland County’s application scored fourth highest in the nation due to the tremendous effort put forth by county officials and staff as well as private consultants.  They should be highly applauded for their efforts.  Cumberland County was not awarded its designation because we are one of the fifteenth worse areas in the nation, but because we had one of the best applications in the nation.  The federal government was obviously impressed with how Cumberland County planned to implement and leverage its strategic plan.

The Empowerment Zone designation allowed for the selection of three developable sites in addition to the qualifying census tracts.  The sites included the Vineland Industrial Park, Millville Airport and Port Norris Waterfront.  Businesses located within these sites are entitled to the benefits of the Empowerment Zone.

Although direct Empowerment Zone funding is limited to a specific geographic area, the entire community benefits through the new employment opportunities, increased tax ratable, the influx of investment and disposable income and the continued exposure and opportunity that is a direct result of being only one of 15 empowerment communities in the nation.  Let there be no doubt, Empowerment Zone designation is a good thing for the entire county!

Cumberland Empowerment Zone Corporation

Phone 856-459-1700       Fax 856-459-4099       www.cezcorp.org

Gerard Velazquez III, Executive Director

       Sandra T. Forosisky, Associate Director   Louis N. Magazzu, Chairman

       Pamela Y. Luster, Stakeholder/Business Liaison   Rev. James Dunkins, Vice Chair

       Rita Errickson, Office Administrator              Russell Davis, Treasurer

       Annali Quinones, Secretary/Receptionist         Karen Barnett, Secretary