NJEDA

 

Updated: August 13, 2021

The Small Business Emergency Assistance Loan Program provides direct financing of up to $100,000 to New Jersey-based businesses and nonprofits that have been negatively impacted by the COVID-19 pandemic.

Applications for the Small Business Emergency Assistance Loan Program (Phase 2) are now closed. Applications were open from Tuesday, August 3rd, 2021 through 3:00 p.m. on Friday, August 13th, 2021 for Stage 1 applicants that have acquired at least 500 square feet of additional space since January 1st, 2021.

Due to the high volume of applications the NJEDA has received during Stage 1, applications for Stage 2 entities will be deferred. Should funding remain available after the NJEDA evaluates all Stage 1 applications, the NJEDA may open the applications for Stage 2 applicants at a later date. If this happens, the NJEDA will send an email notification to all pre-registered Stage 2 applicants.

Eligibility:

All businesses and nonprofits must meet the following baseline eligibility requirements:

  • A physical commercial location in the State of New Jersey.
  • In existence by the date of application launch.
  • $10 million or less in annual revenue.
  • Fully and properly registered to do business with New Jersey Department of Treasury, Division of Revenue and Enterprise Services.
  • In good standing with the New Jersey Division of Taxation (Check your standing with the New Jersey Division of Taxation).
  • In good standing with the Department of Labor and Workforce Development, with all decisions of good standing at the discretion of the Commissioner of the Department of Labor and Workforce Development.

Businesses that meet these baseline eligibility requirements will be sorted into Stage 1 and Stage 2 applicants.

  • Stage1 applicants must have acquired at least 500 square feet of additional space by executing a new lease, leasing additional space, or acquiring an owner-occupied commercial space on or after January 1st, 2021.
  • Stage2 applicants are those that do not meet the new lease, additional leased space or acquired owner-occupied commercial space criteria. Stage 2 applicants that meet the baseline eligibility requirements above ARE eligible for financing.

The following types of businesses ARE NOT eligible:

  • Home-based businesses. A home-based business is a business operated out of a residential property not zoned for commercial activity.
  • Real estate holding companies.
  • Businesses related to gambling or gaming activities.
  • Businesses related to the purveyance of “adult” (i.e., pornographic, lewd, prurient, obscene) activities, services, products, or materials (including nude or semi-nude performances or the sale of sexual aids or devices).
  • Auction or bankruptcy or fire or “lost-our-lease” or “going-out-of-business” or similar sales.
  • Traveling merchants.
  • Christmas tree sales or other outdoor storage.
  • Any other activity constituting a nuisance.
  • Businesses that are illegal under the laws of the State of New Jersey.

Available Funding and Eligible Funding Uses:

Businesses and nonprofits may apply for loans of up to $100,000.

The State has allocated a total of $10 million for the Small Business Emergency Assistance Loan Program (Phase 2). In line with Governor Murphy’s commitment to building a stronger, fairer New Jersey, $3.5 million will be reserved for entities located in one of the 715 census tracts that were eligible to be designated as an Opportunity Zone.

For for-profit entities, the maximum amount a business is eligible to receive will be based on the owners’ average credit scores. Once this cap is determined, the amount the entity is approved for will be based on validation of support provided for the uses requested (i.e. if a business applies for and is eligible for $100,000based on credit score, but the documentation provided only supports $85,000, the request will be reduced to $85,000).

The majority business owner will be required to have an average minimum credit score (FICO) of 600 to be eligible for funding. When there are multiple owners with equal ownership, NJEDA will review the lowest average credit score of all owners and will use the lowest average credit score to determine the amount of funding available. In cases where the lowest average score is below 600, the applicant entity would be eligible for up to $50,000, provided at least one other majority owner has an average credit score above 600.

Below is a chart that shows maximum possible loan size based on credit score:

Loan amounts to non-profit entities will be based only on validation of support provided for the uses requested, but they must also meet a minimum Debt Service Coverage Ratio (DSCR)of 1.00x based on the entity’s most recent tax return or financial statement.

Eligible Expenses:

*Financing can only be used for expenses incurred on or after August 3rd, 2021.

  • Inventory
  • Rent/Mortgage
  • Payroll
  • Utilities
  • Personal protective equipment
  • Furniture, fixtures, or equipment that do not require professional installation costs in excess of $1,999.00

The following are NOT eligible uses of Phase 2 Loan funding:

  • Operating expenses incurred prior to August 3rd, 2021
  • Refinancing of existing debt
  • Personal, non-business obligations or costs incurred by related entities
  • Construction-related expenses or contracts
  • Furniture, fixtures or equipment requiring professional installation costs in excess of $1,999.00

Interest Rate & Terms:

The Small Business Emergency Assistance Loan Program (Phase 2) is structured specifically for