Manuel A. Sablan, CDA executive director, told Variety that the new loan program for small businesses requires the participation of banks.
“We want to explore with the banks the extent of their interest to participate [in the loan program],” Sablan said.
Under the loan program, Sablan said federal funds will be made available to provide funding to establish portfolio insurance reserve account in the participating banks; and to provide funding in the event the loan becomes default.
“This program is geared to inducing banks to make small business loans,” said Sablan.
He said the new loan program is called Capital Access Program. He said this and other similar programs will provide loan guarantees to the banks.
Sablan said, “The program will make the banks provide loans to borrowers that do not necessarily meet their underwriting criteria.”
He also said the program provides cash collateral. “In the event the borrower does not have the sufficient collateral but meets underwriting criteria, but short in coming up with collateral, then funding will be available under that program.”
Since inception, CDA has been helping stimulate economic development in the Northern Marianas. Its total assets as of Sept. 30, 2009 was $26.7 million.
Aside from loans, CDA administers tax incentive program in consultation with the Division of Revenue and Taxation.
