As the CEO of the state’s Economic Development Authority, Tim Sullivan has access to all the unemployment numbers and the results of the quick-hit surveys New Jersey has been doing to try to understand the impact of the COVID-19 outbreak on the business community.
He just didn’t need to see them.
Sullivan, who has worked in governmental economic development jobs his entire career, can see the challenges in the faces of business owners — and hear it in their voices.
“There’s real pain,” he said. “And there’s pain for folks who haven’t done anything wrong. People who woke up one day and this terrible thing is happening around them. They’re dealing with it in their personal lives. They’re worried about their families. And they’re worried about their businesses.
“I think, from the governor on down, that we get that at a gut level.”
That’s why Sullivan was proud of the seven initiatives the EDA approved during a specially called teleconference session Thursday afternoon.
“It’s a $40 million package of direct EDA support, which we think will leverage a total of about $75 million of public and private support of the small business part of the economy in the near term,” he said.
Sullivan will be the first to admit the initiatives aren’t enough. Not nearly enough, by any measure.
“Obviously, the needs are substantially greater than that,” he said.
But they are a start.
“Whatever the feds end up doing programmatically will be needed in a big way,” he said. “But we think this is a big first step. Something the governor is really focused on is making sure we can get some money on the street to the businesses that are hurting the most right now.”
Sullivan is happy to talk about the initiatives, which include 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. (They are detailed in full at the bottom of this column.)
But he’d rather talk about what they are designed to do.
“The goal of this initial package has really been one word: stabilization,” he said. “Trying to get as many businesses as stable as possible through this so that, when we’re able to come out of this crouch — which we have to be in and is a prudent place to be — we can hopefully get as many businesses back up and running at full capacity as quickly as possible. That’s got to be the goal here.”
Sullivan reiterated how small businesses have been a big part of Gov. Phil Murphy’s economic plan from the start.
“So, we do small business lending in the ordinary course of action,” he said. “These are much more generous and flexible terms that will be available to these programs.”
More than that, Sullivan said the EDA is allowed to give out grants, too — thanks to the bill the Legislature signed last week.
“Typically, we can’t do that — it’s a restriction in our enabling statute that’s lifted for periods of emergency,” he said. “The order allows us to have the grant piece of this program.”
Now, he’s looking to make sure business owners hear about the opportunities. He hopes the EDA’s effort don’t get lost in the endless coverage of other programs, including the $2 trillion stimulus package President Donald Trump is expected to sign Friday.
“We’re certainly going to need partners,” he said. “We’re leaning on the chambers and the business associations to make sure that this this information is out in the marketplace as broadly as we can get it.
“We’re working super closely with the team at the Business Action Center and the team at Choose (New Jersey) — and we’ll be working more closely to (the Small Business Administration) than we would in ordinary times,” he said. “We have the opportunity to bring some financial resources to bear here. Things that I think are going to be important.”
Things Sullivan thinks are desperately needed in desperate times.
“Folks are having significant challenges making payroll,” he said. “They’re worried about making rent, worried about making their next loan payment and those kinds of challenges.
“The hope here has to be that we can provide some resources at the federal level, the state level, and the philanthropic and private sectors as well. How many folks can we help stabilize so that when things turn around — and they will turn around, we just don’t know when — people are able to recover as quickly as possible.
“But that’s then. I think it’s premature to be talking about recovery right now. This is about stabilization.”
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.
Read more from ROI-NJ on coronavirus:
- EDA approves 7 programs to help businesses who have suffered from COVID-19 crisis
- Read all ROI-NJ’s coverage of coronavirus in New Jersey