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COVID-19: NJ EDA Small Business Emergency Assistance Loans

On April 13, 2020 at 9:00am, the NJ Economic Development Authority’s Small Business Emergency Assistance Loan program will go “live” for online applications. NJ landlords and property managers suffering from or anticipating an immediate reduction in rental income should seriously consider applying for a loan. These loans have fairly straightforward eligibility criteria and favorable repayment terms. The following is a basic primer on the borrower qualifications and loan terms.

Who Can Apply: Eligible small businesses check all of the following boxes:

  1.  Have a physical commercial location in NJ (no home offices);
  2.  Have been in existence for at least 1 year;
  3.  Have <$5million annual revenue;
  4.  Can show “Global Debt Service Cover Ratio of 1.00.” Although the DSCR is listed as 1.0, presumably a company with a more favorable DSCR would qualify. To calculate DSCR (on the back of napkin) follow this formula: Net Operating Income/Total Debt Service = DSCR.
  5.  Can demonstrate a negative impact because of COVID-19;
  6.  Registered to business in NJ;
  7.  In good standing with (a) Division of Taxation & (b) Department of Labor & Workforce Development  and
  8.  Will certify that best efforts will be made to retain employees and avoid a reduction in workforce.

Loan:  NJ EDA SBEAL loans have very favorable repayment terms. These terms include:

  1.  10 year amortization;
  2.  0% interest for years 1-5;
  3.  Interest capped at 3% for years 6-10;
  4.  Deferred repayment for 12 months;
  5.  No origination or application fees.

There is one important point for landlords. The NJ EDA’s application requires that a potential borrower identify real estate for use as potential collateral. But, the program’s application guide specifically states: “No loans will be declined based lack of collateral.”

Finally, below are some useful links:

Useful Links:

Guide to Preparing the Application & Collecting Required Documents

NJEDA SBEAL FAQs

Offit Kurman, P.A., maintains a broad-based landlord and property owner representation practice. In New Jersey, Offit Kurman represents landlords and property managers in maximizing return, resolving disputes and avoiding unnecessary and costly delays. The Firm’s New Jersey geographic practice area includes: Jersey City, Hoboken, Bayonne, Hudson County, Newark, Essex County, Woodbridge, Middlesex County, Paterson, Passaic County, Hackensack, Bergen County and other points across New Jersey