NJBiz:

“Instead of going to banks, which may view small-business loans as less desirable than other types of lending, many entrepreneurs are turning to local economic development organizations.

Economic development organizations, which focus on promoting economic growth in their areas by helping attract new companies and retain existing ones, are more willing than banks to take a chance on a small business, according to Balozi Harvey, executive director at the Economic Development Corporation of Essex County (EDC) in Newark. Banks may reject loan applications for small startup ventures if the entrepreneur lacks sufficient collateral or excellent credit, or because the bank does not find it cost effective to do small loans, he says.

“The EDC will generally take more risk and possibly not require as much collateral for a loan,” he says. “We won’t automatically disqualify someone if they don’t have a certain credit score.” He adds that the organization will examine the issues behind a low credit rating and may still be able to work out a deal with a business owner.”