NJ16819 – SBA Working Capital Loans Available in New Jersey Due to High Winds, Heavy Rains and Hurricane Isais

ATLANTA – The U.S. Small Business Administration announced today that Economic Injury Disaster Loans are  available to small businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and private nonprofit organizations in New Jersey as a result of high winds, heavy rains and Hurricane Isais that began on Aug. 3-4, 2020.
     Low-interest disaster loans are available in the following counties: Essex, Hunterdon, Morris, Passaic, Somerset, Sussex, Union and Warren in New Jersey.
     “When the Secretary of Agriculture issues a disaster declaration to help farmers recover from damages and losses to crops, the Small Business Administration issues a declaration to eligible entities, affected by the same disaster,” said Kem Fleming, director of SBA’s Field Operations Center East.
     Under this declaration, the SBA’s Economic Injury Disaster Loan program is available to eligible farm-related and nonfarm-related entities that suffered financial losses as a direct result of this disaster.  Except for aquaculture enterprises, SBA cannot provide disaster loans to agricultural producers, farmers and ranchers. Nurseries are eligible to apply for economic injury disaster loans for losses caused by drought conditions.
     The loan amount can be up to $2 million with interest rates of 3 percent for small businesses and 2.75 percent for private nonprofit organizations of all sizes, with terms up to 30 years.  The SBA determines eligibility based on the size of the applicant, type of activity and its financial resources.  Loan amounts and terms are set by the SBA and are based on each applicant’s financial condition.  These working capital loans may be used to pay fixed debts, payroll, accounts payable, and other bills that could have been paid had the disaster not occurred.  The loans are not intended to replace lost sales or profits.
     Applicants may apply online using the Electronic Loan Application (ELA) via SBA’s secure website at DisasterLoan.sba.gov and should apply under SBA declaration #16819, not for the COVID-19 incident.
     Disaster loan information and application forms may also be obtained by calling the SBA’s Customer Service Center at 800-659-2955 (800-877-8339 for the deaf and hard-of-hearing) or by sending an email to DisasterCustomerService@sba.gov(link sends e-mail). Loan applications can be downloaded from sba.gov/disaster.  Completed applications should be mailed to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
Submit completed loan applications to SBA no later than Aug. 18, 2021.
Release Number:   21-185
Release Date:    Wednesday, December 23, 2020 – 12:00am
Contact:   Michael Lampton
Related State:  New Jersey
Field Operations Center:   East

Date: 12/21/2020 U.S. SMALL BUSINESS ADMINISTRATION FACT SHEET: 

ECONOMIC INJURY DISASTER LOANS (SBA DISASTER DECLARATION DUE TO DESIGNATION BY THE SECRETARY OF AGRICULTURE) NEW JERSEY
Declaration 16819 (Disaster: NJ-00060)      Incident: HIGH WINDS, HEAVY RAINS, AND HURRICANE ISAIS occurring: August 3-4, 2020 in the New Jersey counties of: Morris, Sussex, and Warren; the contiguous New Jersey counties of: Essex, Hunterdon, Passaic, Somerset, and Union; the contiguous New York County of: Orange; and the contiguous Pennsylvania counties of: Bucks, Monroe, Northampton, and Pike

Application Filing Deadline: August 18, 2021

Disaster Loan Assistance Available: Economic Injury Disaster Loans (EIDLs) – Working capital loans to help small businesses, small agricultural cooperatives, and 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.

Credit Requirements:

  • 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.

Interest Rates:

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 3.000 percent. Loan Terms: 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.

Loan Amount Limit: 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. If a business is a major source of employment, SBA has the authority to waive the $2,000,000 statutory limit.

Loan Eligibility Restrictions:

  • The applicant business must be located in the declared disaster area.
  • Only uninsured or otherwise uncompensated disaster losses are eligible.
  • The economic injury must have been the direct result of the declared disaster.
  • Nurseries are only eligible for economic injury caused by declared drought disasters.
  • By law, agricultural enterprises such as farmers and ranchers are not eligible for any type of SBA assistance.
  • Applicants who have not complied with the terms of previous SBA loans are not eligible. This includes borrowers who did not maintain flood and/or hazard insurance on previous SBA loans.
  • Loan assistance is available only to the extent the business and its owners cannot meet necessary financial obligations due to the disaster. This determination is made by SBA.

Date: 12/21/2020 Note: Loan applicants should check with agencies / organizations administering any grant or other assistance program under this declaration to determine how an approval of SBA disaster loan might affect their eligibility.

Refinancing:

Economic injury disaster loans cannot be used to refinance long term debts.

Insurance Requirements: To protect each borrower and the Agency, SBA may require you to obtain and maintain appropriate insurance. By law, borrowers whose damaged or collateral property is located in a special flood hazard area must purchase and maintain flood insurance. SBA requires that flood insurance coverage be the lesser of 1) the total of the disaster loan, 2) the insurable value of the property, or 3) the maximum insurance available.

Completing the SBA Loan Application: The application asks for the same information about the business and its principal owners that are generally required for a bank loan. If you need help, SBA personnel will explain the forms and give you assistance at no charge. You may use the services of accountants, attorneys, or other representatives at your own expense, if you wish. Use of a representative and the fees they charged must be listed on your loan application.

Applicants may apply online, receive additional disaster assistance information and download applications at https://disasterloan.sba.gov/ela.

Applicants may also call SBA’s Customer Service Center at (800) 659-2955 or email disastercustomerservice@sba.gov 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.