Preregistration for Phase 2 of the Economic Development Authority‘s Small Business Emergency Assistance Loan Program — one that could be worth up to $100,000 with no interest for first five years — will begin Feb. 10, the EDA announced Wednesday.
The second phase of the $10 million program will make up to $100,000 in low-cost financing available to eligible New Jersey small businesses and nonprofits to help with recovery and reopening efforts as a result of COVID-19. The funding can be used to pay rent or mortgage, payroll, and/or utilities. It can also be used to purchase personal protective equipment or COVID-related inventory, furniture, fixtures or equipment.
Program applications will be reviewed on a first-come, first-served basis, with priority given to applicants that have received no greater than $10,000 in government assistance from any federal, state or local (county/municipal) assistance program.
Any business or entity that intends to apply for a loan must first preregister between 9 a.m. Feb. 10 and 5 p.m. Feb. 22. Preregister at the New Jersey COVID Business Information Portal.
Only entities that preregister will then be able to access the program application beginning at 9 a.m. Feb. 24.
To be eligible for financing through Phase 2 of the program, small businesses and nonprofit organizations must be in existence and in operation from at least Feb. 24, 2020, have $5 million or less in annual revenue and have a physical commercial location in New Jersey. They also must be able to describe how they were negatively impacted by the COVID-19 outbreak. Home-based businesses and real estate holding companies are among the entities that are not eligible for financing under this program.
In line with the terms of Phase 1 of the program, Phase 2 loans will have 10-year terms with zero percent interest for the first five years, then resetting to the NJEDA’s prevailing floor rate for the remaining five years, with a 3% cap.
Most eligible businesses will be able to apply for up to $100,000, but if a business was approved for a loan under Phase 1 of the Small Business Emergency Assistance Loan Program, it will be eligible under Phase 2 only for an amount that will not exceed $100,000 in the aggregate of the two phases. To promote equity, $3.5 million of the funding will be reserved for businesses in Opportunity Zone-eligible census tracts.
EDA CEO Tim Sullivan said the program is another way the state is attempting to support business.
“New Jersey businesses continue to feel the economic weight of COVID-19 as the pandemic stretches into 2021,” he said. “As we begin to see the second COVID wave plateau, we are encouraged that there is a light at the end of the tunnel representing the economic recovery we have been working toward. That recovery can only be attained by connecting small business owners with resources they need to reemerge from the pandemic.
“We are grateful for the USEDA appropriation, which will enable us to reach more small businesses throughout the state.”
The NJEDA initially created its Small Business Emergency Assistance Loan Program in the spring of 2020 as part of a suite of resources for small businesses and nonprofits following Gov. Phil Murphy’s signing of Executive Order 103, declaring a State of Emergency and a Public Health Emergency. The first round of funding from the program resulted in more than 150 businesses being approved for a total of more than $10.4 million.