In response to the economic disruption caused by the COVID-19 outbreak the New Jersey Economic Development Authority (NJEDA) has created programs that allow the NJEDA to put its funds to work in ways that catalyze and leverage additional outside funding and operational capacity. One channel that the NJEDA is working through is the NJ-based Community Development Finance Institutions (CDFIs). By partnering with these organizations, the NJEDA is able to enhance their ability to provide assistance to micro and small business owners impacted by COVID-19.

To see whether you might qualify for this program, use the NJ COVID-19 Business Support Eligibility Wizard.

All CDFIs are certified by the Community Development Financial Institutions Fund at the U.S. Department of Treasury for the purpose of providing credit and financial services to underserved markets and populations. CDFIs play a critical role in providing access to financing tools and resources to businesses and individuals that have difficulty accessing the traditional banking sector. 

Specifically, the NJEDA has created two programs, the CDFI Emergency Assistance Grant Program and the CDFI Loan Loss Reserve Fund to help local CDFI’s scale their lending to micro and small businesses, especially in communities and business segments that are traditionally underserved. 

The CDFI Emergency Assistance Grant Program 

A $1.25 million fund that will provide CDFIs up to $250,000 of grant funding per entity which will help and support CDFIs in two ways during the COVID-19 emergency:

  • Support the scale-up of the origination, technical support, and underwriting capacity of these CDFIs, including hiring staff; and  
  • Allow the CDFIs to buy down interest rates on any COVID-19 related emergency working capital loan, thereby providing impacted businesses with lower-costs and more flexible financing

The CDFI Emergency Loan Loss Reserve Fund 

A $10 million program designed to provide loan guarantees (first loss position) to CDFIs for working capital loans to businesses that have been directly impacted by the COVID-19 crisis after the date of the Governor’s declaration of emergency. This will help CDFIs to provide additional financial resources to more micro and small business owners throughout the state. Each CDFI will have to comply with specific loan program parameters to fit into this program.

  • Made to a company that certifies it has been adversely impacted by the emergency (e.g., closed, reduced hours, 20% reduction in revenue, 25% reduction in staff availability, material disruptions to its supply chain)
  • Focused on working capital needs of a micro or small business
  • Each loan cannot exceed $75,000
  • Interest rates on all loans must be lower than 3.75%
  • Their loans must provide flexible loan structures (e.g. deferred payments, moratoriums or interest only for up to 6 months)
  • Their loans cannot exceed a term of five years

A CDFI may receive a grant under this program and also participate in the Community Development Finance Institution (CDFI) Loan Loss Reserve Fund and the Small Business Emergency Assistance Guarantee Program (although those programs cannot be used for the same loan).

Small Businesses and micro enterprises, some of which may not be able to secure traditional bank financing should reach out to their local CDFI for financing options.  If someone needs more information about their local CDFI please visit

The following types of businesses are not eligible:

  • Related to gambling or gaming activities 
  • Related to the purveyance of “adult” (i.e., pornographic, lewd, prurient, obscene) activities, services, products or materials (including nude or semi-nude performances or the sale of sexual aids or devices) 
  • Auction or bankruptcy or fire or “lost-our-lease” or “going-out-of-business” or similar sale 
  • Traveling merchant 
  • Christmas tree sales or other outdoor storage 
  • Any other activity constituting a nuisance 
  • Illegal under the laws of the State of New Jersey

List of Community Development Finance Institutions (CDFIs) 

  • UCEDC – United Counties (Union County) Development Corp.
  • GNEC – Greater Newark Enterprises Corp.
  • RBAC – Regional Business Assistance Corp.
  • NJCLF – New Jersey Community Loan Fund
  • CBAC – Cooperative Business Assistance Corp.

Updated: March 28, 2020
Source: NJEDA

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