New Jersey will provide approximately $35 million in short-term support to state businesses impacted by Silicon Valley Bank.
NEW JERSEY – In response to the collapse of Silicon Valley Bank (SVB) last week, Governor Phil Murphy announced that the New Jersey Economic Development Authority (NJEDA) will open and launch a series of programs designed to provide emergency aid in New Jersey-based businesses banked by the SVB.
Specifically, this assistance package includes reopening the NJEDA Entrepreneur Support Program, launching the NJEDA Angel Match Program, and scheduling a special board meeting to consider an emergency liquidity facility.
All programs will provide the financial support needed by businesses facing cash flow challenges due to the collapse of SVB and are designed to help businesses meet payroll, pay rent and continue day-to-day operations. Both programs will open on the NJEDA: Angel Match website on Monday, March 13 with the opening of prequalifications and the launch of the Entrepreneur Support Program on Wednesday, March 15.
Biden instructed his team to protect American workers and small businesses and to keep our financial system safe by protecting customers with deposits, including small businesses and workers, and ensuring that no taxpayers’ money is at risk.
“Making New Jersey businesses successful is a critical part of building a stronger, fairer state economy,” Governor Murphy said. “Today more than ever, it is essential that our State support the companies that contribute to our economy, to the innovation ecosystem and to the dynamism of our cities. By delivering a suite of programs to New Jersey business owners impacted by the SVB collapse, we will continue to keep residents employed and support businesses that are vital to our innovation ecosystem.
Funded with $5 million, the New Jersey Entrepreneur Support Program provides a guarantee to support the repayment of an early stage investor loan for working capital purposes and is designed to encourage investors to support businesses at within their portfolios during this liquidity crisis when investor support is particularly crucial. Provides an NJEDA guarantee of up to 80% on a new qualified loan or convertible note by an accredited investor in a qualified New Jersey company, not to exceed a guarantee of $200,000 per company.
On the other hand, the Angel Match program is funded to the tune of $20 million and will help start-up companies bridge funding gaps while growing their operations and refining their products. The program, which will match up to $500,000 in direct investments, is designed to fuel the growth of start-up companies while increasing the pool of available capital, thereby stimulating new investment in New Jersey’s innovation ecosystem. Funding can be used for product development, marketing, research and development and other working capital requirements. This will extend capital support for investors in this time of uncertainty in banking resources.
Finally, the NJEDA Board of Directors will consider creating a $10 million emergency liquidity facility that will review requests for financial support for New Jersey-based businesses with more than $250,000 in SVB deposits. This product is expected to support affected businesses with a loan of up to $500,000 to provide short-term financing options for up to 12 months. The authority’s board will consider approving the program at a board meeting scheduled for next week. More details will be announced before the board meeting.
More information here.