NJEDA – Small Business Emergency Assistance Loan Program Phase 2
NJEDA – Small Business Emergency Assistance Loan Program Phase 2
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.
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 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.
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.
*Financing can only be used for expenses incurred on or after August 3rd, 2021.
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 entities facing economic challenges due to the COVID-19 pandemic. Financing received through the program is subject to flexible terms, including:
10-year term and amortization
0% interest rate
Deferred repayments for 24 months
There are no fees associated with the Small Business Emergency Assistance Loan Program (Phase 2) for the first five years of the loan. After five years, the NJEDA’s standard modification fees will apply, if applicable.
Process to Pre-Register and Apply:
Step 1: Log into the NJEDA Application Portal
If you have never applied for NJEDA financing before, visit the NJEDA application portal now to create a new username and password. Store this information so that you can easily locate it for when the pre-registration period opens.
If you have applied for financing and cannot remember your information, you will be able to reset your password through the portal.
If you have any difficulties creating or finding your username and password, please consult the first several slides of the Sample Pre-Registration document for clear instructions or call the NJEDA Call Center at 844-965-1125 for assistance.
PLEASE NOTE:Creating a username and password does not mean that you are pre-registered for the Phase 2 Loan Program. You will still need to complete a Phase 2 pre-registration form, which will be available until 5:00p.m. on Friday, July 30th, 2021.
Step 2: Pre-Register
All businesses and nonprofits that would like to apply for financing through the Small Business Emergency Assistance Loan Program (Phase 2) must complete the pre-registration form on the NJEDA’s application portal. Pre-registration closed on Friday, July 30th, 2021.
Step 3: Complete Application Form:
Applications for the Small Business Emergency Assistance Loan Program (Phase 2) are closed.
Applications were open for Stage 1 entities from Tuesday, August 3rd, 2021 through 3:00 p.m. on Friday, August 13th, 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.
Generally speaking, applications will be reviewed on a first-come, first-served basis, based on the date and time the NJEDA receives an entity’s completed application form.
If you have questions about your application, call the NJEDA Call Center at 844-965-1125.
Step 4: Upload Financial Information
Once the NJEDA receives your completed application form, staff will conduct a preliminary review to determine if your entity is eligible. All applicants will receive a communication from the NJEDA, even if the Authority does not move forward with your application.
If your entity is determined to be eligible, you will receive an email from the NJEDA with instructions to provide additional financial information about your entity. Once you receive this notification from the NJEDA, you will need to log back into the application portal to upload the required financial information. You will have 5 days from the date/time the NJEDA sends the request to upload the required information.
In order to be as prepared as possible to provide the documentation the NJEDA needs, please see the Document Upload Checklist.
If you need assistance, call the NJEDA Call Center at 844-965-1125. You can also email Ozzie.Lourenco@njsbdc.com for assistance from the New Jersey Small Business Development Center.
Step 5: Closing
If the NJEDA offers your entity a loan, you will be asked to provide following as part of the closing process:
Evidence of proper business insurance coverage.
Copies of a government issued photo identification document for all individuals who may become party to the loan.