The New Jersey Economic Development Authority is pausing an upcoming $10 million round of low-interest loans for businesses as those employers focus on a much larger pool of COVID-relief funds maintained by the federal government.
Known as the Paycheck Protection Program, which opened up again in early January, New Jersey companies slammed by the pandemic were able to secure $17 billion in loans in 2020 and over $2.1 billion in January alone.
Businesses can receive loans under the program, which are forgiven to cover the costs needed to stay afloat, namely payroll and overhead.
Many of the businesses that will utilize this new funding were forced to close for several months amid the height of COVID-19’s first wave, or dramatically scale back operations for months on end.
With enormous demand for state aid and forgivable loans from the Biden and Trump administrations, both the federal and state governments were swamped with applicants for monetary relief.
Tim Sullivan, who heads the NJEDA, said that planning for this round of $10 million was underway when the prior round of the federal loans had ended.
Round one expired in August, and it was not until the start of January following Congressional approval and a signature by then-President Donald Trump that businesses could once again seek out federal aid.
New Jersey businesses during that time were dependent on the slither of funding run by the NJEDA. To date, the agency awarded over $82 million of COVID-19 relief grants to 31,477 employers and over $10 million of low-interest loans to 152 businesses.
“The deferral announced… will provide an opportunity for us to analyze which businesses are unable to benefit from the PPP program and learn what additional support businesses that do receive loans need and adapt our COVID-19 relief efforts to complement federal resources available for small businesses,” Sullivan said in an email Friday.