On Thursday, the Board of the New Jersey Economic Development Authority (NJEDA)approved a series of new program initiatives which are aimed at supporting businesses and their employees who are struggling economically and financially due to the COVID-19 pandemic.
The package of new initiatives is a result of legislation (A3845) co-sponsored by State Senator Brian Stack (D-District 33, Union City). It includes a grant program for small business, a zero-interest loan program for medium-sized companies, plus support for lenders in the private sector and Community Development Finance Institutions (CDFIs).
In total, the package of initiatives will provide over $75 million in state and private, financial assistance. If additional state, federal and philanthropic support becomes available in the future, that total could easily grow to $100 million.
Philanthropic partners who are interested in donating to the NJEDA’s small business grant program are asked to send an email to firstname.lastname@example.org.
The newly announced programs are expected to benefit between 3,000 and 5,000 small to mid-size companies in New Jersey. This is in addition to the recently announced, federal economic stimulus package approved by the U.S. Senate. The stimulus package is expected to be approved by the U.S. House of Representatives later today, according to Speaker Nancy Pelosi, who on Thursday said she expects “a strong bipartisan vote.”
Regarding the NJEDA initiatives, more information about the programs will be available here: https://cv.business.nj.gov.
“The outbreak of the novel coronavirus in New Jersey has sent us into uncharted territory, and the economic impacts will be significant and far-reaching, especially on Main Street. The scope and scale of this new challenge requires immediate action to support New Jersey workers and businesses,” said Governor Phil Murphy. “The new NJEDA programs announced today are a critical step that will mitigate the economic impacts of this unprecedented challenge and help workers and businesses to weather the storm and come out stronger when things return to normal.”
“Small- and medium-sized enterprises are the heartbeat of New Jersey’s economy and it is crucial that we do what we can to provide the resources and assistance they need to withstand the outbreak of novel coronavirus,” said NJEDA Chief Executive Officer Tim Sullivan. “In coordination with our partners throughout State government, we are undertaking an unprecedented effort to support these businesses and the New Jersey residents who rely on them for their livelihoods. These are challenging times, but New Jerseyans are resilient, and together we will get through this and rebuild our economy.”
The package of new initiatives includes:
- Small Business Emergency Assistance Grant Program – A $5 million program that will provide grants up to $5,000 to small businesses in retail, arts, entertainment, recreation, accommodation, food service, and other services – such as repair, maintenance, personal, and laundry services – to stabilize their operations and reduce the need for layoffs or furloughs.
- Small Business Emergency Assistance Loan Program – A $10 million program that will provide working capital loans of up to $100,000 to businesses with less than $5 million in revenues. Loans made through the program will have ten-year terms with zero percent for the first five years, then resetting to the EDA’s prevailing floor rate (capped at 3.00%) for the remaining five years.
- Community Development Finance Institution (CDFI) Emergency Loan Loss Reserve Fund – A $10 million capital reserve fund to take a first loss position on CDFI loans that provide low interest working capital to micro businesses. This will allow CDFIs to withstand loan defaults due to the outbreak, which will allow them to provide more loans at lower interest rates to microbusinesses affected by the outbreak.
- CDFI Emergency Assistance Grant Program – A $1.25 million program that will provide grants of up to $250,000 to CDFIs to scale operations or reduce interest rates for the duration of the outbreak.
- NJ Entrepreneur Support Program – A $5 million program that will encourage continued capital flows to new companies, often in the innovation economy, and temporarily support a shaky market by providing 80 percent loan guarantees for working capital loans to entrepreneurs.
- Small Business Emergency Assistance Guarantee Program – A $10 million program that will provide 50 percent guarantees on working capital loans and waive fees on loans made through institutions participating in the NJEDA’s existing Premier Lender or Premier CDFI programs.
- Emergency Technical Assistance Program– A $150,000 program that will support technical assistance to New Jersey-based companies applying for assistance through the U.S. Small Business Administration. The organizations contracted will be paid based on SBA application submissions supported by the technical assistance they provide.
Additional details on the NJEDA’s new programs, including eligibility requirements will be available here: https://cv.business.nj.gov.
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