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April 09, 2020 | Posted in:

NJ Small Business Loan Window Opens April 13

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

About NJEDA Small Business Emergency Assistance Loan Program

 

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NJEDA Loan Program Details:

 

What is the Program?
The NJEDA Small Business Emergency Assistance Loan Program is a $10 million program that will provide working capital loans of up to $100,000 to small and mid-size businesses in New Jersey.

 

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.

 

Have more questions? Turn to your CPA

Your Alloy Silverstein CPA is here to help. Whether it’s for your NJEDA loan or grant, the Paycheck Protection Program, an Economic Injury Disaster Loan, or an alternative program, don’t hesitate to contact us.

 

COVID-19 Resource Center from Alloy Silverstein CPA Firm Accountants and Advisors NJ

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