Following the approval of New Jersey’s Community Development Block Grant (CDBG) Disaster Recovery Action Plan, the NJ Economic Development Authority (EDA) was tasked with administering $460 million of the state’s CDBG Disaster Recovery allocation to assist storm-impacted businesses. Recently, the EDA approved the creation of the Stronger NJ Business Loan Program. The Stronger NJ Business Loan Program is the second of these CDBG-funded business recovery initiatives and will utilize $100 million of the allocation.
The new loan program will provide New Jersey small businesses with loans of up to $5 million to repair physical damage or expand operations in communities impacted by the storm. The loans are available to support working capital needs and/or renovations or new construction of the place of business. The maximum working capital loan amount is $500,000, exclusive of equipment. The maximum renovation or new construction loan amount is $5 million.
The Stronger NJ Business Loan Programs will be available to small businesses statewide, with a focus on the nine most impacted counties of Atlantic, Bergen, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean, and Union, as defined by the US Department of Housing and Urban Development (HUD). To be eligible, all businesses must: (1) have at least one location in New Jersey; (2) have been in existence at the time of the storm; (3) be a small business as defined by the Small Business Administration (SBA); and (4) have annual revenues of at least $25,000. In addition, businesses located within the nine counties must either: (1) positively impact the economy of their community through either capital investment or the creation or retention of jobs; and/or (2) evidence a minimum of $5,000 in physical damage to real property and/or loss damage of non-perishable and non-consumable inventory. In contrast, New Jersey small businesses located outside of the nine counties must meet the $5,000 damage/loss requirement.
It is important to note, that this CDBG Recovery Assistance is meant to be funding of last resort to satisfy “unmet needs,” which are defined as financial needs not satisfied by other public or private funding sources. As a result, HUD requires that businesses must have applied to and received a declination or approval for an SBA disaster loan if the SBA Program is still active. The SBA deadline for Physical Damage loans was May 1, 2013; the Economic Disaster Loan deadline is currently July 31, 2013. Accordingly, if an entity still has a pending application with SBA from the recently closed Physical Damage Disaster Loan, they will need to wait for a determination before submitting their application to the EDA. If a company is seeking funds related to physical damage, which could include construction, but did not apply for the SBA program before it lapsed, the company may still apply for the Stronger NJ Business Loan program. If an entity has needs that could be funded by an Economic Injury Disaster Loan, which could include working capital to cover salaries and expenses, they will need to apply to SBA and receive a final determination before they will be able to submit a Stronger NJ Business Loan application,
Beginning July 1, 2013, small businesses (including non-profits) can start the Stronger NJ Business Loan application process.