NJEDA Receives USEDA Grant to Expand Small Business Emergency Assistance Loan Program
Sep 2, 2020
The New Jersey Economic Development Authority (NJEDA) announced a $ 10 million extension of its Small Business Emergency Assistance Loan program to help support small businesses and nonprofits affected by the pandemic of COVID-19. The expanded program will be capitalized by a grant received from the Coronavirus Aid, Relief, and Economic Security (CARES) Act of the United States Economic Development Administration (USEDA).
“As we have said on several occasions, while COVID-19 is first and foremost a health crisis, it is also a serious economic crisis affecting small business owners in communities in our state,” said said Governor Phil Murphy. “Small businesses are the heart of our economy and it is our responsibility to ensure that we obtain the necessary financing to help them succeed in these unprecedented and turbulent times. “
NJEDA initially established its Small Business Emergency Assistance Loan program in the spring as part of a series of resources for small businesses and nonprofits following Governor Murphy’s signing of Decree 103, declaring a state of emergency and a public health emergency. The program was started with $ 10 million in funding from NJEDA, and to date NJEDA has approved over $ 7.5 million in loans under the program. Additional requests are under consideration.
The second phase of the Small Business Emergency Assistant Loan Program will be launched as a $ 10 million program and will provide up to $ 100,000 in low-cost financing to small businesses and organizations for purpose. New Jersey nonprofit eligible to help with recovery and reopening efforts in the aftermath of COVID-19. Funding can be used to pay rent or mortgage, payroll, and / or utilities. It can also be used to purchase inventory, personal protective equipment (PPE), furniture, accessories or equipment. To ensure fairness, $ 3.5 million of the funding will be set aside for businesses in census tracts eligible for the opportunity zone.
NJEDA expects the application for its Small Business Emergency Assistance Loan – Phase 2 program to be available in the fall.
Under the terms of Phase 1 of the program, Phase 2 loans will have a ten-year term with zero percent interest for the first five years, then reset to the NJEDA’s prevailing floor rate for the five years. remaining, with a ceiling of three percent. .
“We are grateful to USAEDA for realizing the tremendous pressure New Jersey small businesses and nonprofits are under as they begin to recover from the economic impact of COVID-19,” NJEDA chief executive Tim Sullivan said. “Under Governor Murphy’s leadership, we’ve made it a priority to support small businesses that have faced incredibly difficult decisions in recent months. The funding announced today will go a long way in helping small business owners free up capital to move forward, whether that’s creating jobs, getting PPE, or one of the many other steps needed to get out of business. the pandemic. “
To be eligible for funding under Phase 2 of the Small Business Emergency Assistance Loan Program, small businesses and non-profit organizations must exist and have been operating for at least one year prior to the date of application. launch application, have $ 5 million or less in annual income, and a physical business location in New Jersey. They must also be able to show a negative impact resulting from the COVID-19 outbreak. Home-based businesses are not eligible for funding under this program.
“NJEDA has a long history of supporting small businesses during strong and turbulent economic times,” said Dana Gartzke, who serves as deputy trade secretary for economic development. “We are proud to work with Tim Sullivan and his team to get funds into the hands of the companies that need it most.
The USAEDA announced the awarding of the grant at a press conference in Atlantic City today. NJEDA is one of six New Jersey entities or communities to share a total of $ 15.6 million in federal grants from the federal agency’s CARES Act. The other entities are Burlington County, the Cooperative Business Assistance Corporation, the Jersey City Economic Development Corporation, Rutgers – the university center of the State of New Jersey, and the South Jersey Economic Development District. NJEDA Senior Vice President – Finance and Development Lori Matheus represented NJEDA at today’s event.
Gartzke noted that the USEDA’s $ 11 million to NJEDA was provided to his agency through the CARES Act. The grant will cover the expansion of NJEDA’s Small Business Emergency Assistance Loan program and related administrative costs.
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