As with the federal government and many other state governmental agencies, late last week the New Jersey Economic Development Authority (NJEDA) Board approved a package of new programs that will provide tens of millions of dollars in support to businesses and workers affected by the coronavirus pandemic. The package includes, among other things, grant packages for small businesses, zero interest loan program for mid-size companies and support for private sector lenders and community development financial institutions. Notably, the availability of funds under the various programs is on a first come, first served basis. Below is a summary of the programs; however, for more specific details, eligibility requirements and information, please see the resources provided by the New Jersey Business Action Center.
Small Business Emergency Grant Program:
A $5 million dollar program that will provide grants of up to $5,000 to small businesses in retail, arts, entertainment, recreation, accommodation, food service and other services to stabilize operations and reduce the need for layoffs or furloughs.
Small Business Emergency Loan Program:
A $10 million dollar program that will provide working capital loans of up to $100,000 to businesses with less than $5 million in revenues. The loans will have 10-year terms with zero percent interest for the first five (5) years then resetting to the NJEDA’s prevailing floor rate (capped at 3%) for the remaining five (5) years of the loan term.
Community Development Finance Institution (CDFI) Emergency Loan Loss Reserve Fund:
A $10 million dollar capital reserve fund to take a first loss position on CDFI loans that provide low interest working capital to microbusinesses. This will allow CDFIs to withstand loan defaults caused by the pandemic, which will allow CDFIs to provide more loans at lower interest rates to microbusinesses impacted by the COVID-19 outbreak.
New Jersey Entrepreneur Support Program:
A $5 million dollar program that will encourage continued capital flows to innovation economy companies and temporarily support a cautious investor market by providing 80% loan guarantees for working capital loans to start-up entrepreneurs.
Small Business Emergency Assistance Guarantee Program:
A $10 million dollar program that will provide 50% guarantees on working capital loans and waive fees on loans made through institutions participating in NJEDA Premier Lender or CDFI programs.