The New Jersey Economic Development Authority received more than 20,000 applications in the opening hours of phase 2 of its Small Business Emergency Assistance Grant Program on Tuesday morning.
The better news: EDA head Tim Sullivan is hopeful that a large amount of those applying will receive grants from the $45 million of available funding.
It’s always difficult to gauge — as the EDA needs to ensure those applying are eligible — but Sullivan said the average size of the companies applying (three employees or fewer) leads him to believe that many of the applications will receive aid.
The first phase of the program — which only had $5 million in funding — was oversubscribed almost immediately.
The second phase not only had much more funding, it also was open to a far greater number of companies. In addition, $15 million of the $45 million available will be allocated to companies based in Opportunity Zone ZIP codes.
Sullivan said he is hopeful that a large number of applications will be granted. And, though the program is closing in on being oversubscribed, Sullivan encouraged companies to continue to apply — specifically those in underserved communities, which may be in Opportunity Zones.
Reaching those in underserved communities was a top priority of phase 2 of the program.
The EDA also announced that is expanding its Micro Business Loan Program, which will provide financing up to $50,000 for micro businesses and nonprofits with 10 or fewer employees and no greater than $1.5 million in annual revenues.
The expanded program will provide financing to businesses for inventory, equipment and working capital. Loans will have a standard 10-year term. Interest rates will be set at 2%, with no interest and no payment due for the first three years. Businesses that receive financing under the enhanced program and are still in operation 12 months after the closing date of the loan will have 10% of the approved loan amount forgiven.
The program is open to for-profit businesses with a business location in New Jersey, as well as home-based businesses and not-for-profit organizations that have been in operation for at least two years. Startup businesses, defined under the program as business in operation between six months and one year, may also be eligible for the program, but will be required to provide a business plan and five-year projections at application.
More information about the enhanced program is available at www.njeda.com/microbusinessloan.
“Microbusinesses are a vital component of New Jersey’s economy, providing unique services and employment opportunities, but, because of their size, many of these businesses have had a particularly difficult time responding to the challenges COVID-19 poses,” Sullivan said. “The expanded program will ensure more businesses have access to the resources they need to survive the current crisis and return to full strength soon.”