The New Jersey Economic Development Authority approved a package of seven initiatives that can be worth an estimated $75 million to $100 million to help businesses cope with the impact the coronavirus outbreak has had on the economy, voting during a special meeting Thursday afternoon that was called on account of the crisis.
Included in the approvals is a grant program for small businesses, a zero-interest loan program for midsize companies, support for private-sector lenders and community development financial institutions, funding for entrepreneurs, and a variety of resources providing technical support and marketplace information.
The EDA estimates that, taken together, the programs will provide more than $75 million of state and private financial support, with the opportunity to grow to more than $100 million if additional philanthropic, state and federal resources become available. The EDA said the initiatives will support between 3,000 and 5,000 small and midsize enterprises and are meant to complement recently announced federal economic recovery initiatives.
A look at the programs:
- 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 10-year terms with zero percent for the first five years, then resetting to the EDA’s prevailing floor rate (capped at 3%) for the remaining five years.
- Community Development Finance Institution 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 microbusinesses. 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% loan guarantees for working capital loans to entrepreneurs.
- Small Business Emergency Assistance Guarantee Program: A $10 million program that will provide 50% 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.
More information about the programs, including complete eligibility requirements, is available here.
According to Tim Sullivan, the CEO of the EDA, the initiatives focus on businesses that have been hit hardest by the novel coronavirus outbreak: local small businesses, midsize businesses that have had to close or drastically reconfigure operations, and new businesses who were just getting on their feet before the crisis hit. Sullivan said the programs provide a suite of compatible offerings that address these businesses’ varied needs and include mechanisms to provide funding and assistance as quickly as possible.
“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,” Sullivan said in a release. “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 EDA said many of the resources are designed to be scalable with the addition of federal and philanthropic resources if they become available. Philanthropic partners interested in donating to support the NJEDA’s small business grant program should reach out to firstname.lastname@example.org.
Complete information about New Jersey’s response to the novel coronavirus outbreak is available here.