The New Jersey Economic Development Authority expanded its Micro Business Loan Program to assist businesses with 10 or fewer employees.
The expanded program will provide financing up to $50,000 for micro businesses and nonprofits with no greater than $1.5 million in annual revenues.
“Micro businesses are a vital component of New Jersey’s economy, providing unique services and employment opportunities, but because of their size, many of these businesses have had a particularly difficult time responding to the challenges COVID-19 poses,” said NJEDA Chief Executive Officer Tim Sullivan in prepared statement. “The expanded program will ensure more businesses have access to the resources they need to survive the current crisis and return to full strength soon.”
The Micro Business Loan Program was launched in November, and the expanded program will provide financing up to $50,000 to businesses for inventory, equipment and working capital.
Loans will have a standard 10-year term. No payments will be due for three years, and interest rates will be set at 2 percent thereafter. Businesses that receive financing and are still in operation 12 months after the closing date of the loan will have 10 percent of the loan amount forgiven.
The expanded program is open to for-profit businesses with a business location in New Jersey, as well as home-based businesses and not-for-profit organizations that have been in operation for at least two years. Startup businesses in operation for between six months and one year may also be eligible for the program but will be required to provide a business plan and five-year projections.
To ensure resources are available to micro businesses, eligibility will be limited to businesses with annual revenues under $1.5 million, 10 or less full-time employees, and a demonstrated ability to service the proposed debt.
The chief executive officer, president, or owners of the applicant business must also certify that the business will make its best effort not to furlough or lay off anyone through the end of the current public health emergency, and companies that have already furloughed or laid off workers must make a best effort pledge to rehire the same workers as soon as possible.
Of the $10 million in total funding available from the NJEDA, $3.5 million will be set aside to support businesses within Opportunity Zone-eligible census tracts.