A $75 million aid package unveiled by the New Jersey Economic Development Authority (NJEDA) on March 26 aims to help keep small- and mid-size businesses afloat as the state continues to grapple with the COVID-19 pandemic.
“Our recovery begins with our small businesses,” stated Gov. Phil Murphy
With many ordered to shut or forced to alter how they operate, businesses across the state have been hit hard by the outbreak. Telling residents to stay home and closing nonessential businesses indefinitely are among the measures the state has implemented to stop New Jersey’s surging coronavirus levels.
Murphy said the public health emergency’s impact will be “significant and far-reaching, especially on Main Street” and requires “immediate action to support New Jersey workers and businesses.”
Grants, Loans Offered
The newly-announced initiatives to support businesses include zero-interest loans, grants and other aid, and will assist an estimated 3,000 to 5,000 enterprises “as quickly as possible,” according to the NJEDA.
Including the private funds the state’s $41.1 million in programs will leverage, around $75 million in support for businesses will be available, officials said. If additional philanthropic, state and federal resources become available, officials hope the total could become more than $100 million.
Murphy said the incentive package is “a critical step that will mitigate the economic impacts of this unprecedented challenge” and will help businesses “weather the storm and come out stronger when things return to normal.”
New Jersey Heartbeat
In a press release, NJEDA Chief Executive Officer Tim Sullivan said, “Small- and medium-sized enterprises are the heartbeat of New Jersey’s economy and it is crucial that we do what we can to provide the resources and assistance they need to withstand the outbreak of novel coronavirus.”
“In coordination with our partners throughout state government, we are undertaking an unprecedented effort to support these businesses and the New Jersey residents who rely on them for their livelihoods,” Sullivan said. “These are challenging times, but New Jerseyans are resilient, and together we will get through this and rebuild our economy.”
A First Step
Michele Siekerka, president and chief executive officer of the New Jersey Business and Industry Association, called the initiative package “a great first step” towards helping businesses hit hard. In recent weeks, the association has fielded “hundreds of calls and emails” from business owners unable to meet payroll or pay their bills because there is little to no revenue coming in and little reserves, she said.
“While we know much more help will be needed in terms of federal and state funding to improve the overall fiscal health of New Jersey businesses and non-profits, these NJEDA programs and their immediacy will be of significant help,” Siekerka said.
Applications should be available the week of March 30, with the loan program starting the following week, according to the NJEDA. Additional details can be found here.
- Small Business Emergency Assistance Grant Program: A $5 million program providing grants up to $5,000 to small businesses in retail, arts, entertainment, recreation, accommodation, food service and other services to stabilize operations and reduce the need for layoffs or furloughs.
- Small Business Emergency Assistance Loan Program: A $10 million program providing working capital loans of up to $100,000 to businesses with less than $5 million in revenues. Loans made through the program will have ten-year terms with zero percent interest for the first five years, then resetting to the NJEDA’s prevailing floor rate (capped at 3.0%) for the remaining five years.
- Community Development Finance Institution (CDFI) Emergency Loan Loss Reserve Fund: A $10 million capital reserve fund to take a first loss position on CDFI loans providing low interest working capital to micro businesses. This will allow CDFIs to withstand loan defaults due to the outbreak, allow them to provide more loans at lower interest rates to micro businesses affected by the outbreak.
- CDFI Emergency Assistance Grant Program: A $1.25 million program providing 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 providing 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 supporting technical assistance to New Jersey-based companies applying for assistance through the U.S. Small Business Administration (SBA). The organizations contracted will be paid based on SBA application submissions supported by the technical assistance they provide.
New Jersey, which ranks 11th in the number of small businesses in the U.S., has over 861,000 enterprises, according to the New Jersey Business Action Center.
“The majority of New Jerseyans work for small businesses. This isn’t just about supporting our small and midsize-business owners. It’s also about supporting the men and women who work for them,” Murphy said during a press conference.
The governor called the March 26 unemployment numbers “a real gut punch” to the state and nation. A record 155,000 workers in New Jersey filed unemployment claims, 16 times the number of people who applied for unemployment benefits the week before, according to Murphy.
The state launched a COVID-19 Jobs and Hiring Portal on March 23 to help link laid-off workers with companies that are actively hiring. According to the database, 41,000 jobs have been posted by 375 employers, including Instacart, Amazon, Hackensack Meridian Health, ShopRite and the Port Authority of New York & New Jersey.
Since the site went online March 23, more than 230,000 job seekers have visited it, Murphy said.