The New Jersey Economic Development Authority will see another $50 million from the federal government in the near future, which would be provided as grants to businesses that have seen their revenues plummet during the COVID-19 pandemic and ensuing recession.
Gov. Phil Murphy, at his daily press briefing in Trenton on Friday afternoon, assured that the funds will “serve as a vital lifeline to thousands of small businesses that are struggling.”
It is not immediately clear how soon the NJEDA will see those funds, but Murphy said a board vote would need to be held to formally accept the money.
“Details to come but expect to see funds for the existing backlog of grant [applications] and also a broadening of eligibility,” NJEDA Chief Executive Officer Tim Sullivan tweeted soon after the announcement.
GREAT news from @GovMurphy with allocation of $50m of federal funding to expand @NewJerseyEDA small biz grant programs – details to come but expect to see funds for existing backlog of grant apps and also a broadening of eligibility
— Tim Sullivan (@timsullivan510) May 15, 2020
The organization’s existing grant program ran out of money just over an hour after applications opened, with more than 32,000 businesses vying for funds. Just over $5 million was awarded to roughly 1,000 separate companies. Grants are capped at between $1,000 and $2,000 for companies employing up to 10 people, under the existing version of the program.
Companies must have a base office in New Jersey – home offices do not qualify. Businesses also have to show they will not lay off any employees, and that they’ve been hit by the COVID-19 outbreak.
With the economy in a state of suspended animation to stop the spread of the virus, and restrictions only now just being rolled back, tens of thousands of businesses in New Jersey have seen their revenues shattered.
“A recovery cannot start until adequate amounts of working capital are identified and made available,” Tom Bracken, president of the New Jersey Chamber of Commerce, said in a May 5 statement.
Demand soared for the NJEDA’s $10 million small business loan program, with 3,260 businesses applying for a combined $228.7 million from the state’s much smaller pot of money. The money for both programs has only just been paid out to businesses in recent weeks.
“As expressed to our policymakers in an April 16 letter, the need to flow more money out of EDA’s small business grant programs is of the utmost importance to our small businesses,” Michelle Siekerka, president and chief executive officer of the New Jersey Business & Industry Association.
“Simply put, many are struggling for their survival and their need is nothing short of urgent.”