As part of the seven initiatives announced by the NJEDA last month, the application period for the NJ Small Business Emergency Assistance Loan Program begins this Monday, April 13, 2020.
Keep in mind that, like the Grant program that opened on Monday, April 6, the program funds are capped and are expected to reach capacity quickly. It is important to work with your CPA ahead of time so that you are prepared to file your complete application in a timely manner.
Infographic: The NJEDA Small Business Emergency Assistance Loan Program
What are the loan terms?
Up to 10 years for businesses with $5 million or less in revenue. Interest rate is 0% for the first 5 years and is capped at 3% for years 6 through 10.
When do applications begin?
Monday, April 13, 2020 at 9:00am online. Funds are capped and are anticipated to run out quickly.
What is the NJEDA Loan eligibility criteria?
$5M or less in annual revenue
In business for at least 1 year
Physical commercial location in NJ (not home-based)
Registered to do business in NJ
Minimum credit score of 600 for at least one guarantor
Minimum global Debt Service Coverage Ratio (DSCR) of 1.0 to 1 based upon prior year financial statements
Current on state filings and in good standing with NJ DOL
Not a home-based business
Not a prohibited business
Negatively impacted by COVID-19 pandemic
What documents do I need to prepare for the loan application?
Basic company information:
Contact details
Legal name and DBA
Federal EIN
Full-time employees, Part-time employees, and other workers (independent contractors and 1099s) as of 12/31/19
Prior year’s annual revenue
Formation documents
2-3 sentence description about the company
Identify owners and respective percentage of ownership
Personal financial statement(s) and 3 years of filed personal tax returns and personal financial statement for those with >10% ownership
Up to 3 years of most recent corporate federal tax returns
Profit & Loss and Balance Sheet (if 2019 return is not yet filed)
Existing corporate debt details
Use of loan proceeds (amount, timeframe, supporting documentation)
Payroll, rent/mortgage, taxes, utilities, etc.
Document sources that will cover the gap if loan doesn’t cover all expenses
Identify potential collateral
Affirmation that you have been impacted by COVID-19 (e.g., closure, reduced hours, 20% revenue drop, 20%, etc.)
Affirmation that you will make effort not to lay off additional employees and will re-hire any whom you already laid off
Must fill out and certify simplified debarment legal questionnaire
Additional conditions may apply
Upon approval, will need to provide business insurance coverage, ACH details, and government-issued photo ID.
