"The US Federal Reserve recently announced cuts in interestrates to lower the cost of borrowing, and to help speed economicactivity," says EDA chief executive officer Caren S. Franzini."This action today will allow us to remain a competitive lender andto effectively support Gov. Corzine's economic growthstrategies."

The EDA plans to adjust its rates downward on some of itsprograms to as low as 2%. Interest rate ceilings would not bealtered by the action. Specifically, the change would impact EDAfinancing assistance that is offered under certain urban loanprograms, as well as direct loans offered through the EDA withvariable rates, which would see a new interest rate floor of 2%instead of the current 3% rate.

Other small-business and brownfields lending programs offered byEDA, along with fixed interest rate direct loans, would carry newinterest rate floors of 3%. They now have those floors set at a 4%interest rate.