The New Jersey Economic Development Authority rolled out the specifics for how businesses hurt by the COVID-19 pandemic can apply for a $10 million state loan program, after a similarly-natured grant program was depleted just an hour after applications opened on April 3.
A copy of the application for the Small Business Emergency Assistance Loan program was posted on the EDA’s website on Monday evening. Companies can apply starting 9 a.m. on April 13.
In the meantime, business owners can use an online “eligibility wizard” to gauge which state assistance programs could help them the most.
This second program from the EDA provides direct loans of up to $100,000 to New Jersey-based small businesses and nonprofits that have been in existence for at least one year and have less than $5 million in annual revenue.
The loans are not forgivable, as are other COVID-19 relief loan programs at the federal level. But payments can be deferred for the first 12 months, while interest rates are set at 0 percent for the first five years of the loan, then capped at 3 percent for the remaining five years.
Those businesses have to show specifically how they have been hit by the COVID-19 economic slump— such as a cut in business hours, employees’ inability to work, a decline of at least 20 percent in revenue, an ordered closure by the Murphy administration, or a complete closure of their shop.
Applicants would have to show specifically where the funds would be used: payroll, rent, mortgage, taxes, utilities or inventory, and provide the most recent bills, statements or invoices to back up those claims.
The applications require a myriad of documents, such as tax returns from anyone with at least 10 percent ownership; the business formation documents; several consecutive years of the business’s federal tax returns and financial documents such as income and cash flow statements, and balance sheets.
Applicants also have to show the other kinds of debt the company already has, and the business’s real estate that could be used as collateral.
All told, the EDA set up $41 million of loans, grants and loan guarantees, on top of the billions of dollars made available by federal aid.
But if last Friday was any indication, the $10 million Small Business Emergency Assistance Loan program could quickly dry up in just a matter of hours.
Applications for the EDA’s Small Business Emergency Assistance Grant Program went live April 3 at 9 a.m.. As of 10:16 a.m. there were more than 10,000 applicants, and that number had ballooned to more than 26,000 applicants as of April 4. The agency expects to approve up to 2,000 applications.
Editor’s note: This story was updated at 4:00 p.m. EST on April 7, 2020 to include deferment details and interest rates for the Small Business Emergency Assistance Loan program. It was updated again at 6:35 a.m. EST on April 8, to clarify the headline that the program is a loan and not a grant.