Late last week, the New Jersey Economic Development Authority (NJEDA) announced small business initiatives providing grants and loans for small businesses. The programs include:
Small Business Emergency Assistance: A total of $5 million available to small and medium-sized businesses and non-profits, with 1-10 full-time employees, to provide up to $5,000 as unrestricted payroll and working capital support. It cannot be used for any capital expenses, including construction. The grant values are calculated at $1,000 per full-time employee. This grant is for retail, accommodations and food services, arts, entertainment and recreation, and other services defined with NAICS codes starting with 811 and 821. Home-based businesses are not eligible for this grant.
The business must have been negatively impacted by the COVID-19 declared state of emergency in Executive Order 103 (e.g., has been temporarily shut down, has been required to reduce hours, has had at least a 20% drop in revenue, has been materially impacted by employees who cannot work due to the outbreak, or has a supply chain that has materially been disrupted and therefore slowed firm-level production).
The focus of this round of funding is on the smallest enterprises in industries that are among the most adversely impacted by the COVID-19 containment measures. The goal of the grants is to try to preserve the ability for small businesses to support and maintain a workforce during this containment period that is as close to pre-outbreak levels as possible. Applications are anticipated to be opened during the week of March 30th (UPDATE - APPLICATIONS WILL BE RECEIVED STARTING APRIL 3, 2020) Completed applications will be considered on a first-come, first-serve rolling basis.
Small Business Emergency Assistance Loan Program: A total of $10 to million provide working capital loans up to $100,000 to businesses and non-profits, with less than $5 million in revenue, to cover operating expenses and ensure continuity of operations during the outbreak. The program will provide a 10-year term and amortization with 0% interest rate for the first 5 years and to EDA’s prevailing floor rate, capped at 3%, for years 6-10 with deferred repayments for 12 months.
This loan program is for businesses negatively impacted by the COVID-19 outbreak (including, but not limited to: reduction of business hours, complete closure of business, at least a 20% decline in revenue, employees unable to work, required to close by government, or disruption of supply chain). Applications are targeted to open during the week of March 30th. Completed applications will be considered on a first-come, first-serve rolling basis.
Community Development Finance Institution (CDFI) Emergency Loan Loss Reserve Fund: A total of $10 million capital reserve fund providing low-interest working capital to micro-businesses to provide additional resources. Each loan cannot exceed $75,000 and the interest rate must be lower than 3.75% with flexible loan structures. The term of the loan cannot exceed 5 years. Small Businesses and micro enterprises, some of which may not be able to secure traditional bank financing should reach out to their local CDFI for financing options. If someone needs more information about their local CDFI please visit EDA’s Small Businesses Services.
CDFI Emergency Assistance Grant Program: A total of $1.25 million providing grants up to $250,000 to CDFI to support the scale-up of operations, technical support, and underwriting capacity of these CDFI, including hiring staff. If someone needs more information about their local CDFI please visit EDA’s Small Businesses Services.
NJ Entrepreneur Guarantee Program: - A total of $5 million to encourage investment by encouraging private sector investors to provide additional working capital loans to NJ-based entrepreneurial businesses in which the investor is already an equity holder. EDA will guarantee up to 80% of the total investment amount, not to exceed $200,000 per NJ entrepreneurial company. Applications will be accepted in the coming weeks. Completed applications will be considered on a first-come, first-serve rolling basis.
Small Business Emergency Assistance Guarantee Program: - a $10 million pilot program that makes available one-year first loss guarantees of permanent working capital loans and lines of credit originated by Premier Lender banks. These loans must be made to cover operating expenses for New Jersey small businesses and non-profit organizations that have been impacted by the COVID-19 outbreak. The program provides a 50% guarantee, not to exceed a total EDA exposure of $100,000, for working capital loans or lines of credit to support business continuity for a range of COVID-19 related impacts to businesses (reduced revenue, employee shortage, supply chain impact, etc.). There are no EDA fees associated with applying for this program.
Emergency Technical Assistance Program: a $150,000 program that will support technical assistance to NJ based companies applying for assistance through the US Small Businesses Administration. More information will be forthcoming over the next week and can be found on the state’s COVID-19 Information for New Jersey Business website.