Businesses rebounding from the COVID-19 pandemic and pummeled by the past 16 months of operating restrictions can now tap into state subsidies under a new round of loans.
As part of the Murphy administration’s Small Business Emergency Assistance Loan Program, businesses and nonprofits hit by the pandemic can apply for loans of up to $100,000, which last 10 years with a 0% interest rate and deferred payments for the first two years.
The New Jersey Economic Development Authority, which runs the program, said pre-registration opens July 20.
It’s the latest in hundreds of millions of dollars in state support meant to hold establishments over during the litany of COVID-19 mandated closures that pummeled businesses such as gyms, restaurants, bars, hotels, salons and retail outlets.
Businesses have scrounged for money amid those closures in order to stay afloat and keep their workers on the payroll.
Under the federal Paycheck Protection Program, the U.S. Small Business Administration approved 157,405 forgivable loans totaling $17.3 billion in 2020, and in 2021 approved 134,362 loans totaling roughly $8 billion.
And under the SBA’s restaurant-relief program, the Biden team awarded nearly $924 million to 3,086 bars and restaurants in the state–less than half of the 7,792 eateries in New Jersey that applied for funding.
Hundreds of millions of dollars have been awarded by the state, as well.
State officials contend the finances in this latest round could be a shot in the arm for employers, especially small businesses, eyeing how to scale up operations in the midst of the reopening.
Tim Sullivan, who heads the NJEDA, said those funds would be vital to help business owners “reopen and thrive,” especially as the state moves into its “recovery from the COVID-19 pandemic.”
Loans are initially limited to businesses with up to $10 million in annual revenue, and that have added at least 500 square feet of new commercial space after Jan. 1. Applications open at 9 a.m. on Aug. 3.
Employers not meeting this commercial space requirement would be able to apply for loans at 3 p.m. on Aug. 13.
Real estate holding companies, home-based businesses and gambling and adult companies are not eligible for the loans. The funds can be used for rent and mortgage, inventory, utilities, payroll and personal protective equipment like masks and gloves.
The funds could not go toward debt refinancing, construction, personal expenses of the business owners and furniture purchases over $1,200.
A third of the loans, $3.5 million, are set aside for businesses within the state’s 715 poorest communities, known as Opportunity Zone eligible census tracts.
Gov. Phil Murphy in late June approved $20 million of COVID-relief grants for bars and restaurants and $10 million for the “Sustain and Serve NJ” program – which effectively pays restaurants to prepare meals for some of the state’s most in-need residents – out of a $235 million round of state funding for employers.
The NJEDA is in the midst of an $85 million round of grant funding to help businesses stay afloat. And the state budget Murphy approved last month includes $135 million of direct business relief.
Murphy estimated that his administration has given out more than $600 million in grants, low-interest loans and other forms of assistance since the COVID-19 closures first went into effect in March 2020.v