In addition to the relief offered small business by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, including forgivable Paycheck Protection Program loans, the New Jersey Economic Development Authority COVID-19 Economic Relief Package provides an alternative source of working capital for entities facing economic challenges due to COVID-19. The NJEDA will begin accepting applications for its Small Business Emergency Assistance Loans Monday, April 13th at 9:00 am and time is of the essence. The Program has an initial size of $10 million and NJEDA will consider applications on a first-come, first-serve rolling basis.
The Small Business Emergency Assistance Loan program is designed to provide a direct working capital loan of up to $100,000 to NJ-based small businesses that have been in existence for at least one year, have less than $5 million in annual revenue, and have been negatively impacted by the COVID-19 pandemic. Among other things, negative impact may include reduced business hours, complete closure of business, or a minimum 20% fall in revenue. Other requirements for eligibility must be satisfied, including certain minimum financial qualifications (a global debt service coverage ratio of 1.00 as of December 31st, 2019 and a minimum Credit Score of 600 for at least one guarantor) and organizational good standing (registered to do business and in good standing in New Jersey, in good standing with the Department of Labor and Workforce Development, and must certify that the company is in good tax standing with the State of New Jersey). Additional conditions apply and certain limited businesses are expressly excluded.
Under the Small Business Emergency Assistance Loan program, eligible borrowers will receive low-cost and flexible loan terms, such as:
· 10-year term and amortization;
· 0% interest rate for years 1-5 and NJEDA’s prevailing interest rate floor (capped at 3.0%) for years 6-10;
· Deferred repayments for 12 months; and
· No fees for the first five years of the loan, including application fees, and then standard modification fees will apply.
To see if your company may qualify for this program, use the NJ COVID-19 Business Support Eligibility Wizard
. You also may now access a copy of the loan application
to help you prepare your submission. As always, we are here to help in any we can. Please do not hesitate to contact us should you have questions regarding your loan alternatives or the NJEDA loan application specifically. We can also assist you with obtaining or preparing copies of required organizational documents if needed.
Please contact us if you have any questions or concerns. We are here to help you navigate your way through the loan process should you need us or with any other business issues that may arise. You can reach us by phone at (609) 452-7100 or via email to our attorneys’ individual email addresses.