The New Jersey Economic Development Authority unveiled a package of seven new incentive programs aimed at keeping businesses in the state afloat as they see customers and profits dwindle amid the COVID-19 global recession.
Thursday’s incentives, totaling $41.4 million, entail a combination of grants and zero-interest loans that the agency is looking to hand out to companies “as quickly as possible” – with an eye toward “small” and “mid-sized businesses” – according to a statement from the EDA.
The $41 million in incentives would, combined with private financial support, total to $75 million. That could come out to more than $100 million for business support, assuming the addition of federal and philanthropic dollars.
“The outlook ahead is uncertain – with residents, businesses, and policymakers unsure of how long this will last and what the road to recovery looks like,” Tim Sullivan, president and chief executive officer of the EDA, said in the Thursday morning board memo.
“What we do know, with certainty, is that the economic impact on New Jersey is already significant. New unemployment claims have skyrocketed and businesses are reporting significant reductions in sales.”
One program is the Small Business Emergency Assistance Grant Program, capped at $5 million, which gives grants of up to $5,000 to industries such as retail, arts and entertainment, recreation, food, and restaurants and hospitality.
Businesses must have up to 10 full-time employees and have an office in the state in order to qualify for grant money—$3 million in the pot is set aside for companies with up to five workers. Those businesses have to show that they will not lay off any employees and that they actually need the money to stay in business.
The EDA expects it will award up to 2,000 such grants.
A second program is the $10 million Small Business Emergency Assistance Loan Program, which provides loans of up to $100,000 for businesses that make less than $5 million a year.
Applicants have to show that the COVID-19 outbreak has caused either a 20 percent decline in revenue, a mandated closure by the state government, a supply chain disruption, or made employees unable to work. The loans last 10 years with a zero percent interest rate for the first five years that goes up to 3 percent for the next five years.
Another program, capped at $10 million, will provide money to “community development financial institutions” so they can provide low-interest loans to small businesses that might not necessarily go to banks. The NJ Entrepreneur Support Program is aimed at helping businesses with less than 25 employees and $5 million in annual revenue by providing loan guarantees of up to 80 percent.
Meanwhile, the $10 million Small Business Emergency Assistance Guarantee Program would provide loan guarantees of up to 50 percent, capped at $500,000
“The outbreak of the novel coronavirus in New Jersey has sent us into uncharted territory, and the economic impacts will be significant and far-reaching, especially on Main Street,” Gov. Phil Murphy said in a Thursday morning statement.
Michele Siekerka, president of the New Jersey Business & Industry Association, said in a statement that although “much more” help will be needed from the federal government, “these EDA programs and their immediacy will be of significant help.”
“Throughout this health crisis, we have fielded hundreds of calls and emails from New Jersey business owners unable to meet payroll and pay their bills because they have little to no revenue coming in and little reserves,” she added. “By and large, they are desperate to stay afloat and devastated to have made difficult staff decisions.”
Editor’s note: This story was updated at 5:17 p.m. EST on March 26, 2020 to include figures to reflect the potential addition of private financial, and federal and philanthropic support to the NJEDA’s $41 million incentive programs.