Murphy thrilled N.J. has access to loans, but urges small businesses to hold out (if they can) for grants

By Tom Bergeron
Trenton | Mar 19, 2020 at 3:28 pm

Gov. Phil Murphy said he was glad the U.S. Small Business Administration approved the state’s application for small businesses to apply for federal disaster loans.

But he also said small businesses shouldn’t immediately jump at the offer. Better deals, he said, could be coming.

“This is certainly good news, but I would urge all but the hardest-hit businesses — those who are facing life-and-death decisions right now — to take a step back, if possible,” he said.

Murphy, speaking at his daily briefing Thursday, said the state learned a lesson on this during Superstorm Sandy, when he said homeowners and small businesses were pushed to apply for disaster loans, only to learn that they could have been eligible for grants that were made available later on.

He said getting such block grants is one of the things he is working on with neighboring states New York, Pennsylvania and Connecticut.

“We are going to fight, alongside our federal delegation and those from our neighboring states, for a stimulus package that includes small business grants,” he said. “And, in that, we will fight to ensure that any loans provided now could be paid down by grant funds later.”

Murphy said he hopes to have a state business-assistance program shortly. He said the Economic Development Authority is able to help guide small businesses in making these decisions — and encouraged business owners with questions to go to the New Jersey Business Action Center’s COVID-19 information page, cv.business.nj.gov.

Murphy also reiterated his desire to have banks take pressure off those who owe mortgages.

The governor did not make any mention of changing rules regarding bank mortgage payments for individuals, but he again urged — “in the strongest possible terms,” he said — banks and lenders to do what they can for their mortgage customers to make loan repayment much more flexible in the coming weeks and months.

“We simply cannot have families already anxious over their health anxious about whether they’re going to lose a roof over their heads,” he said.

SBA Administrator Jovita Carranza said Thursday that the SBA is offering low-interest federal disaster loans for working capital to small businesses in New Jersey suffering substantial economic injury as a result of the coronavirus.

“These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact,” Carranza said. “Disaster loans can provide vital economic assistance to small businesses to help overcome the temporary loss of revenue they are experiencing.”

Carranza said eligibility for Economic Injury Disaster Loans is based on the financial impact of the coronavirus. The interest rate is 3.75% for small businesses. The interest rate for private nonprofit organizations is 2.75%.

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