What federal or Small Business Administration (SBA) financial assistance programs are available for my business?
The U.S. Senate Committee on Small Business and Entrepreneurship has prepared a Small Business Owner’s Guide to the CARES Act on all of the forthcoming federal resources. SBA has also established a dedicated page of Coronavirus (COVID-19): Small Business Guidance & Loan Resources for all current and pending assistance pertaining to economic relief during the current crisis.
New Jersey has also compiled information regarding other federal competitive grant opportunities, some of which are open to businesses. The Small Business Administration is administering the following COVID-19 relief programs.
Paycheck Protection Program (PPP)
UPDATE 1/11/2021: SBA, in consultation with the U.S. Treasury Department, reopened the Paycheck Protection Program loan portal at 9 a.m on Monday, January 11, 2021. When the PPP loan portal system opens, it will initially accept First Draw PPP loan applications from participating CFIs, which include Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs), and Microloan Intermediaries. These loans are designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.
The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees. Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
More information and loan forgiveness applications are available at: https://www.sba.gov/funding-programs/loans/paycheck-protection-program-ppp
Economic Injury Disaster Loans (EIDLs)
UPDATE 1/5/2021: SBA recently extended the deadline to apply for new Economic Injury Disaster Loans (EIDL) from qualified small businesses and U.S. agricultural businesses. Applications can be accessed via the SBA’s COVID-19 relief webpage. While Economic Injury Disaster loans (EIDL) are still available, SBA is no longer giving out EIDL advances. The new deadline is December 31, 2021.
If your COVID-19 Economic Injury Disaster Loan was declined, you can request reconsideration within six months of the date of the decline letter. Include your application number and information required to overcome the reason for decline. You can send this information via email to firstname.lastname@example.org or mail to the U.S. Small Business Administration Disaster Assistance Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, Texas, 76155.
All New Jersey counties are now approved for federal disaster assistance, making New Jersey businesses eligible to apply for Economic Injury Disaster Loans (EIDLs). These are working capital loans to help small businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private, non-profit organizations of all sizes meet their ordinary and necessary financial obligations that cannot be met as a direct result of the disaster. These loans are intended to assist through the disaster recovery period.
To see whether you might qualify for this program, use the NJ COVID-19 Business Support Eligibility Wizard.
To be eligible for EIDL assistance, New Jersey-based small businesses or private non-profit organizations must have sustained economic injury, as well as being located in a disaster-declared county or contiguous county, which all New Jersey counties currently are.
- Credit History – Applicants must have a credit history acceptable to SBA.
- Repayment – Applicants must show the ability to repay the loan.
- Collateral – Collateral is required for all EIDL loans over $25,000. SBA takes real estate as collateral when it is available.
- SBA will not decline a loan for lack of collateral, but SBA will require the borrower to pledge collateral that is available.
The interest rate is determined by formulas set by law and is fixed for the life of the loan. The maximum interest rate for this program is 3.750 percent.
The law authorizes loan terms up to a maximum of 30 years. SBA will determine an appropriate installment payment based on the financial condition of each borrower, which in turn will determine the loan term.
The law limits EIDLs to $2,000,000 for alleviating economic injury caused by the disaster. The actual amount of each loan is limited to the economic injury determined by SBA, less business interruption insurance and other recoveries up to the administrative lending limit. SBA also considers potential contributions that are available from the business and/or its owner(s) or affiliates.
Applicants may apply online, receive additional disaster assistance information and download applications at covid19relief.sba.gov.
Applicants may also call SBA’s Customer Service Center at (800) 659-2955 or email email@example.com for more information on SBA disaster assistance. Individuals who are deaf or hard-of-hearing may call (800) 877-8339.
Completed applications should be mailed to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155
Shuttered Venue Operators (SVO) Grant
The Shuttered Venue Operators (SVO) Grant program was established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, signed into law on December 27, 2020. The program includes $15 billion in grants to shuttered venues, to be administered by the Small Business Administration’s Office of Disaster Assistance.
Eligible applicants may qualify for SVO Grants equal to 45% of their gross earned revenue, with the maximum amount available for a single grant award of $10 million. $2 billion is reserved for eligible applications with up to 50 full-time employees.
Eligible entities include:
- Live venue operators or promoters
- Theatrical producers
- Live performing arts organization operators
- Relevant museum operators, zoos and aquariums who meet specific criteria
- Motion picture theater operators
- Talent representatives
Visit the SBA's Shuttered Venue Operators Grant page for more information.
Express Bridge Loan Pilot Program
This program allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan. If a small business has an urgent need for cash while waiting for decision and disbursement on an Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan of up to $25,000.