Starting in July, a new loan program will offer direct, low-cost loans of up to $5 million to businesses and nonprofits that suffered physical damage as a result of Hurricane Sandy, as well as to businesses wanting to expand within communities affected by the storm. The New Jersey Economic Development Authority (NJEDA) approved the creation of the Stronger NJ Business Loan Program on June 11, 2013 at its monthly Board meeting.
The Stronger NJ Business Loan Program is the second business recovery initiative funded by New Jersey’s Community Development Block Grant (CDBG) Disaster Recovery Action Plan and will make available $100 million of the $460 million allocated to assist storm-impacted businesses. Its predecessor, the Stronger NJ Business Grant Program, was launched in May.
Although the Stronger NJ Business Loan Program will be available to entities located anywhere in New Jersey, it will have different eligibility requirements for the nine counties identified as the most severely impacted by the storm: Atlantic, Bergen, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean and Union.
According to the press release on the NJEDA website, businesses located outside the nine counties are required to demonstrate a minimum of $5,000 in physical damage to real property and/or loss or damage of non-perishable and non-consumable inventory in order to qualify for a loan under the Program. By contrast, businesses located within the nine counties may satisfy eligibility requirements either by meeting the $5,000 damage/loss requirement or by positively impacting the economy of their community through capital investment or the creation or retention of jobs.
The Stronger NJ Business Loan Program will support two kinds of loans, each with its own maximum amount. Working capital loans will have a maximum loan amount of $500,000, not counting equipment. Renovation or new construction loans will have a maximum loan amount of $5 million.
As a general matter, only small businesses with at least $25,000 in annual revenues and at least one New Jersey address and whose existence predates the landing of Hurricane Sandy will qualify. In addition, Program loans may not be used to satisfy financial needs met by other public or private funding sources and will not be disbursed to businesses unless they have applied for an SBA disaster loan.