“We credit the NJEDA for the important work they are doing, but unfortunately, the ongoing need far exceeds the available resources to New Jersey’s small business community, which represents 99.6% of all business in the state and employs 50% of our workforce,” NJBIA President & CEO Michele Siekerka said.
With more than 908,209 small businesses in New Jersey, today’s announcement means only 2.2% of small businesses have applied for and received EDA assistance during the pandemic, Siekerka pointed out.
“There continues to be federal CARES ACT money that is already in our state that is going untapped and sitting on the sidelines at a time that it can be used to provide a needed boost to our job creators,” Siekerka said. “Further, with limited state resources, we continue to call upon our federal legislators to pass an additional relief package that will directly earmark additional relief to our New Jersey job creators.”
NJEDA said it has approved 20,073 businesses for more than $74.2 million in support through grants, low-cost loans, partnerships with investors and Community Development Financial Institutions (CDFIs), and technical assistance programs.
“Governor Murphy has made supporting small businesses a central focus of our state’s response to the COVID-19 crisis, and the NJEDA team has worked tirelessly to support these 20,000 businesses at a time when that help is so badly needed,” said NJEDA Chief Executive Officer Tim Sullivan.
“The economic impact of this pandemic is extraordinary and ongoing – and our efforts to do all we can to support small businesses must continue as well,” he said.
The NJEDA’s suite of COVID-19 relief programs provides a variety of resources for businesses of all sizes, including grants for small businesses, zero-interest loans, support for private-sector lenders and CDFIs, and funding for entrepreneurs.
The NJEDA’s largest COVID-19 relief program is the Small Business Emergency Assistance Grant Program, which provides grants to small businesses impacted by the pandemic. To ensure equitable distribution of funds, the NJEDA set aside one-third of the funding for this program to support qualified businesses located in one of the 715 census tracts that were eligible to be selected as a New Jersey Opportunity Zone. This targeting has helped to ensure minority- and women-owned businesses that were hardest hit by the pandemic’s economic impact were able to get the support they need.
To date, 19,166 small businesses have been approved for grants worth a total of more than $56,800,000 through the Small Business Emergency Assistance Grant Program. The number of grant recipients will increase as the NJEDA continues to process applications and distribute grants. The average grant award has been roughly $3,000, which indicates the average approved business has three full-time equivalent employees. NJEDA said 20% of grant funding awarded through Phase 2 of the program has gone to businesses that identified as minority-owned, 23% as women-owned, and 2% as veteran-owned.
The Small Business Emergency Assistance Loan Program provides working capital loans of up to $100,000 to businesses with less than $5 million in revenues. Loans made through the program have 10-year terms with 0% interest for the first five years. To date, the NJEDA has approved 133 loans through the program worth a combined total of $9,123,187.
Of the businesses approved for loans, 27% self-identified as woman-owned, 18% self-identified as minority-owned, and 4% self-identified as veteran-owned.
In addition to providing resources directly to businesses, the NJEDA has partnered with six New Jersey-based CDFIs through the CDFI Initiative to provide low-cost financing to small and microbusinesses. To be designated as a CDFI, an institution must certify that at least 60% of its financing activities are targeted to low- and moderate-income populations or underserved communities.
With NJEDA support, the six partner CDFIs have provided 258 loans worth a total of $6,073,258. Of the businesses approved for loans through the CDFIs, 39% self-identified as woman-owned, 21% as minority-owned, and 2% as veteran-owned.
The NJEDA has also supported early-stage innovation economy businesses, which are facing their own unique set of COVID-19-related challenges. The NJ Entrepreneur Support Program encourages continued capital flows to new companies by providing 80% loan guarantees for working capital loans to entrepreneurs. To date, this program has supported investments in 12 companies with $1,836,000 in guarantees.
In addition to financial support, the NJEDA has also provided a variety of technical assistance programs for businesses struggling to adjust to new health and safety guidelines. The Authority partnered with the African American Chamber of Commerce of New Jersey (AACCNJ), the Statewide Hispanic Chamber of Commerce of New Jersey (SHCCNJ), the New Jersey State Veterans Chamber of Commerce, and Rising Tide Capital to provide technical assistance for 447 businesses applying for federal Small Business Administration support.
Since then, the Authority has rolled out a number of other initiatives to help businesses adjust to doing business safely during the pandemic, including free business consulting for micro-businesses in Opportunity Zones, and training on ecommerce solutions for retail businesses and restaurants. There are 57 businesses are currently participating in these programs. In addition, the NJEDA has launched the PPE Access Program, which provides reduced-cost PPE for small businesses and information on the equipment they need to keep their employees and customers safe.
NJEDA said it continues to explore new ways to address the challenges business owners and employees face and will announce additional programs and funding opportunities as they become available. More information about the NJEDA’s COVID-19 response is available at https://covid19.business.nj.gov.