A $45 million pot of state aid meant to offer a lifeline to businesses hit hard by the COVID-19 pandemic and economic recession may have already run dry, just over an hour after applicants went live.
As of roughly 10:08 a.m., a total of 14,000 businesses applied for the program, with the average grant at $3,000, according to Tim Sullivan, chief executive officer of the New Economic Development Authority, which oversees the program. Applications went live at 9 a.m.
“Due to high demand, this funding may be exhausted, but submitting your application will ensure that if additional funds become available for this round of grant funding, you may be eligible,” reads the NJEDA’s online application page.
The “grant-size calculator” counts one full-time employee making $4,600 in each quarter, and the average size was that of three full-time employees.
At the governor’s daily COVID-19 press briefing at the Trenton War Memorial on Tuesday, Sullivan said that he expects around 16,000 grants to be awarded.
Many of the applicants need to be parsed for eligibility, he clarified, so even with the high number of applicants, that does not mean new applicants would be shut out. Decisions will be made the week of June 15, Sullivan said.
“We’ll make some good news starting early next week,” he said.
Grants are capped at $10,000, rather than the previous $5,000 for a much smaller pot of money – $5 million – from April. Roughly 28,000 businesses who applied were told they would likely not receive funding from that first round, Sullivan said. Funding for round one also ran out just an hour after applications went live.
On Tuesday, the NJEDA board approved grant eligibility for veterans support organizations, as well as local chambers of commerce, and business and industry associations.
The Trump administration awarded $50 million for the NJEDA to use, $5 million of which is going toward applicants waitlisted from the first round.
As of Monday evening, the NJEDA awarded $3.4 million in grants from that pot of money—$2.8 million has been paid out while another 737 applications were under review, according to NJEDA spokesperson Virginia Pellerin.
Demand also 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. Twenty loan applications were approved for a total of $1.06 million, seven of which were closed totaling $443,000 and nine of which are in the process of closing, totaling $469,000, Pellerin said. Another 32 applications are being underwritten.
Emphasis under the program is given to businesses located in one of the 715 census tracts across the state considered to be one of its 169 opportunity zones – a federal tax break program meant to help some of the nation’s poorest communities. The state already maintains a map of those 715 potential zones.
Eligibility is limited to companies with no more than 25 employees. “Home-based businesses and sole proprietorships,” for example, architects and plumbers, can now apply for grants. Applications are accepted on a first-come, first-serve basis.
Employers need to have been in operation on Feb. 15, taken a hit by the pandemic, and make a “best effort” to not furlough or layoff any workers.
Editor’s note: This story was updated 1:55 p.m. EST on June 9, 2020, to include additional comments from NJEDA Chief Executive Officer Tim Sullivan.