NJEDA Announces Phase 2 Small Business Emergency Loan Program
Updated: Feb 3, 2021
Originally published in Meadowlands Magazine
Article submitted by Meadowlands Chamber of Commerce
The New Jersey Economic Development Authority (NJEDA) today announced it will open pre-registration for Phase 2 of its Small Business Emergency Assistance Loan Program at 9:00 a.m. EST on Wednesday, February 10, 2021. The $10 million program expansion will support New Jersey small businesses and nonprofits impacted by the COVID-19 pandemic and will be capitalized by a United States Economic Development Administration (USEDA) Coronavirus Aid, Relief, and Economic Security (CARES) Act appropriation. Any business or entity that intends to apply for a loan must first pre-register during this pre-registration period, which will run from 9:00 a.m. EST on February 10, 2021 to 5:00 p.m. on February 22, 2021.
The second phase of the Small Business Emergency Assistant Loan Program will make up to $100,000 in low-cost financing available to eligible New Jersey small businesses and nonprofits to help with recovery and reopening efforts as a result of COVID-19. The 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), or COVID-related inventory, furniture, fixtures, or equipment.
Program applications will be reviewed on a first-come, first-served basis, with priority given to applicants that have received no greater than $10,000 in government assistance from any federal, state, or local (county/municipal) assistance program.
Most eligible businesses will be able to apply for up to $100,000, but if a business was approved for a loan under Phase 1 of the Small Business Emergency Assistance Loan Program, it will be eligible under Phase 2 only for an amount that will not exceed $100,000 in the aggregate of the two phases. To promote equity, $3.5 million of the funding will be reserved for businesses in Opportunity Zone-eligible census tracts.
Applicants MUST pre-register in order to apply for the Small Business Emergency Assistance Loan Program. Pre-registration for the Small Business Emergency Assistance Loan Program will open at 9:00 a.m. on February 10, 2021 on the New Jersey COVID Business Information Portal and will remain open until 5:00 p.m. on February 22, 2021. Only entities that pre-register will then be able to access the program application beginning at 9:00 a.m. February 24, 2021. The order in which final applications are received may affect funding availability, as referenced above.
“New Jersey businesses continue to feel the economic weight of COVID-19 as the pandemic stretches into 2021,” said NJEDA Chief Executive Officer Tim Sullivan. “As we begin to see the second COVID wave plateau, we are encouraged that there is a light at the end of the tunnel representing the economic recovery we have been working toward. That recovery can only be attained by connecting small business owners with the resources they need to re-emerge from the pandemic. We are grateful for the USEDA appropriation, which will enable us to reach more small businesses throughout the state.”
To be eligible for financing through Phase 2 of the Small Business Emergency Assistance Loan Program, small businesses and non-profit organizations must be in existence and in operation from at least February 24, 2020, have $5 million or less in annual revenue, and have a physical commercial location in New Jersey. They also must be able to describe how they were negatively impacted by the COVID-19 outbreak. Home-based businesses and real estate holding companies are among the entities that are not eligible for financing under this program.
In line with the terms of Phase 1 of the program, Phase 2 loans will have ten-year terms with zero percent interest for the first five years, then resetting to the NJEDA’s prevailing floor rate for the remaining five years, with a three percent cap.
The NJEDA initially created its Small Business Emergency Assistance Loan Program in the Spring of 2020 as part of a suite of resources for small businesses and nonprofits following Governor Murphy’s signing of Executive Order 103, declaring a State of Emergency and a Public Health Emergency. The first round of funding from the program resulted in more than 150 businesses being approved for a total of more than $10.4 million.
Comprehensive information about New Jersey’s coronavirus response is available at https://cv.business.nj.gov.
To read Governor Murphy’s full economic plan, please visit: https://nj.gov/economicplan