The New Jersey Economic Development Authority (NJEDA) today announced that the Authority’s COVID-19 response efforts have supported more than 10,000 businesses since March 2020. In total, the Authority has provided more than $44.2 million in support to 10,624 businesses through grants, low-cost loans, and partnerships with investors and Community Development Financial Institutions (CDFIs).
“These programs have provided a vital lifeline to many small businesses as we navigate how to safely restart our economy while continuing to prioritize public health,” said New Jersey Gov. Phil Murphy. “We continue to be fully committed to helping businesses weather this crisis.”
The NJEDA’s suite of COVID-19 relief programs provides a variety of resources for businesses of all sizes, including grants for small businesses, zero-interest loans, support for private-sector lenders and CDFIs, funding for entrepreneurs, and technical support and marketplace information. In addition to direct financial support, the NJEDA has also provided a variety of technical assistance programs for businesses struggling to adjust to new health and safety guidelines, including help applying for federal Paycheck Protection Program (PPP) loans and training on ecommerce solutions for retail businesses and restaurants.
“While the COVID-19 pandemic is first and foremost a public health crisis, it has also created major economic challenges that have hit minority- and women-owned businesses the hardest,” said NJEDA Chief Executive Officer Tim Sullivan. “While there is still significantly more work to do, the insights we have gained from what we have accomplished so far will guide our next steps toward addressing business owners’ concerns and helping them prepare for a strong recovery.”
The NJEDA’s largest COVID-19 relief program is the Small Business Emergency Assistance Grant Program. Launched in early April with $5 million of NJEDA funds, the Program initially offered grants of up to $5,000 to a narrowly targeted set of small businesses that included restaurants and in-person retail establishments. In early June, the NJEDA used $50 million in CARES Act funds to expand Phase 1 of the grant program by $5 million and launch Phase 2 of the Grant Program with $45 million. Phase 2 expanded the Program to a significantly broader range of businesses and increased the maximum grant award to $10,000. At that time, Essex, Ocean, and Passaic Counties each also provided $10 million in CARES Act dollars to support additional grants to businesses in those counties.
To ensure equitable distribution of funds, the NJEDA set aside one-third of the CARES Act funding to support qualified businesses located in one of the 715 census tracts that were eligible to be selected as a New Jersey Opportunity Zone.
To date, 10,415 small businesses have received grants worth a total of more than $33 million through the Small Business Emergency Assistance Grant Program. The average grant award has been roughly $3,000, which indicates the average approved business has three full-time equivalent employees. 3,383 businesses received grants during Phase 1, and so far, 7,032 have received grants during Phase 2. The number of Phase 2 grant recipients will increase as the NJEDA continues to process applications and distribute grants.
20% of grant funding awarded through Phase 2 of the program has gone to businesses that identified as minority-owned, 23% as women-owned, and 2% as veteran-owned.
The Small Business Emergency Assistance Loan Program provides working capital loans of up to $100,000 to businesses with less than $5 million in revenues. Loans made through the program have ten-year terms with 0% interest for the first five years. To date, the NJEDA has closed on 76 loans through the program worth a combined total of $5,133,028. Of the approved loan funding. 30% has gone to businesses that self-identified as woman-owned, 13% as minority-owned, and 5% as veteran-owned.
In addition to providing resources directly to businesses, the NJEDA has partnered with six New Jersey-based CDFIs through the CDFI Initiative to provide low-cost financing to small and microbusinesses. With NJEDA support, these CDFIs have provided 121 loans worth a total of $3,673,500. Of the businesses approved for loans through the CDFIs, 45% self-identified as woman-owned, 25% as minority-owned, and 2%as veteran-owned.
The NJEDA has also supported early-stage innovation economy businesses, which are facing their own unique set of COVID-19-related challenges. The NJ Entrepreneur Support Program encourages continued capital flows to new companies by providing 80% loan guarantees for working capital loans to entrepreneurs. To date, this program has supported investments in 12 companies with $1,723,996 in guarantees.
Going forward, the NJEDA will continue to process applications for the existing COVID-19 relief programs and awarding funding as appropriate. The Authority continues to explore new ways to address the challenges business owners and employees face and will announce any additional programs and funding opportunities as they become available.