New Jersey small businesses devastated by Superstorm Sandy now have a new source of economic assistance. Approved by the New Jersey Economic Development Authority on June 11 2013, the Stronger NJ Business Loan Program went into effect on July 1, 2013, and offers direct, low-cost loans to businesses and nonprofits that sustained physical damage as a result of Hurricane Sandy, as well as to businesses wanting to expand within communities affected by the storm.
To be eligible, all businesses must:
- have at least one location in New Jersey;
- have been in existence at the time of the storm;
- be a small business as defined by the Small Business Administration (SBA); and
- have annual revenues of at least $25,000.
Additionally, businesses located in Atlantic, Bergen, Cape May, Essex, Hudson, Middlesex, Monmouth, Ocean and Union – the counties that have been identified as being the most severely impacted by the storm – must either demonstrate: (1) that they 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. For businesses located in all other New Jersey counties, they must meet the $5,000 damage/loss requirement to be eligible.
The loan program is designed to support two kinds of loans – working capital needs, and renovation or new construction in the place of business. Working capital needs include such things as: repaying or refinancing debt used to pay working capital (not physical damage) after the storm; salary, wages and fringe benefits; mortgage, rent or property lease payments; perishable and non-perishable inventory; supplies; utility bills; equipment and machinery leases and rentals; marketing; insurance premiums related to the business; and, federal, state, county, local or other taxes and assessments not in arrears. The maximum working capital loan amount is $500,000, exclusive of equipment.
Approved uses of loan monies for the renovation or new construction component of the program include: repair or replacement of the physical structure, building systems, electrical, plumbing, furnishings, exterior structures, or equipment or machinery of any costs that also requires installation; carpentry or other construction costs associated with repair or replacement of the place of business; installation of fixtures; mitigation; new construction and renovations; landscaping; paving; architectural or engineering services; other construction-related services excluding accounting, legal or financing service costs; and, any of the above costs paid to satisfy insurance deductibles. The maximum renovation or new construction loan amount is $5 million.
As a general matter, 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.
Small businesses (including non-profits) can now start the Stronger NJ Business Loan application process. For more information, call EDA’s Sandy hotline at 1-855-SANDY-BZ to speak with a representative.
Wilentz, Goldman & Spitzer, P.A.