East Brunswick offers aid through low-interest loans Fire departments, rescue squad and school board have benefited

Staff Writer

By Nicole c. vaccaro

East Brunswick offers aid through low-interest loans
Fire departments, rescue squad and school board
have benefited

East Brunswick will apply for low-interest loans on behalf of its fellow governing entities in order to secure the best rate possible.

According to township Business Administrator Jim White, "By turning to the municipality for financial assistance rather than a bank, the borrower agrees to let us research and apply for loans based on the township’s credit rating as a whole.

"And because our credit rating is so good, we are able to get much lower rates than the individual group most likely would on their own," added White.

While the loan rates will fluctuate depending on current interest rates, this alternative method to borrowing usually ends up costing borrowers half as much as if they were to apply for the loan on their own.

For example, Fire District 1 was able to finance its new brush truck at a rate of about 4.5 percent, rather than the 9.5 percent area banks were offering, White said.

So far, the district’s three fire companies, the rescue squad and the Board of Education have each obtained low-interest loans through this program.

Fire District 1 has acquired three loans, District 2 between four and five loans, District 3 one loan, the rescue squad three loans, and the Board of Education four, according to Finance Director Lou Neely.

The largest sum acquired to date funded new construction at East Brunswick High School.

The Board of Education was able to borrow approximately $14 million for the project at a rate close to 4.5 percent.

"Using the municipality as a vehicle for financial lending works out best for all those involved, including the taxpayers," said Neely.

"In each of these cases, we’ve saved these groups anywhere from thousands to millions of dollars. And this was possible without raising the municipality’s individual tax rate. It’s a dollar neutral solution."

The municipality has engaged in assisted borrowing since 1983.

Any entity interested in using this method to acquire a loan needs to make its case before the township Judiciary Committee.

"It just makes sense," concluded White. "If you absolutely need a loan, why not let somebody else search for and obtain the best rate possible?"