The U.S. Small Business Administration and the Department of Agriculture installed a program in 1997 that will guarantee hundreds of millions of dollars worth of small-business loans in 35 specially selected areas where Nafta has led to job losses. When Nafta was signed in 1994, the U.S. Government set aside $22.5 million for this loan program. The loans, spread over 19 states, are designed to create new jobs. The areas affected will include cities such as Syracuse, N.Y., and small towns such as Hawkins, Wis.
The North American Development Bank, an international financial institution jointly capitalized and governed by the U.S. And Mexico, will coordinate the program. Small businesses also can apply for loans directly from NADBank.
To get their loans through the SBA, small businesses must meet the standards of the SBA's conventional 7(a) loan-guarantee program designed for small businesses that cannot receive credit through normal channels. The small businesses also must prove that they will create or retain one job for every $35,000 of the total loan amount.
Companies in the affected areas could also receive their loans through the Department of Agriculture's Business and Industrial loan-guarantee program. It mainly guarantees loans in rural areas.
-- Posted the week of August 11, 1997
Source: The Wall Street Journal August 7, 1997 pg. B2