In response to the collapse of Silicon Valley Bank (SVB) last week, New Jersey Governor Phil Murphy announced that the New Jersey Economic Development Authority (NJEDA) will open and launch a series of programmes designed to provide emergency assistance to New Jersey-based companies that were banked by SVB.
This assistance package consists of the reopening of the NJEDA’s Entrepreneur Support Program, the launch of the NJEDA’s Angel Match Program, and the scheduling of a special board meeting to consider an emergency liquidity facility.
All programmes are designed to assist businesses in meeting payroll, paying rent, and continuing their day-to-day operations in the face of liquidity challenges caused by the SVB’s collapse.
Both programmes will launch on the NJEDA’s website early this week, with Angel Match launching on Monday, March 13 at 9:00 a.m. and the Entrepreneur Support Program launching on Wednesday, March 15 at 9:00 a.m.
The New Jersey Entrepreneur Support Program, which is funded at $5 million, provides a guarantee for the repayment of an investor loan advanced for working capital purposes and is designed to encourage investors to support businesses within their portfolios during this liquidity crisis, when investor support is especially crucial.
It provides a NJEDA guarantee of up to 80 percent for a new loan or convertible note made by a qualified investor to a qualified New Jersey business, with a maximum guarantee of $200,000 per company.
The Angel Match Program, funded at $20 million, will assist early-stage companies in bridging funding gaps as they scale their operations and refine their products.
The programme, which will match up to $500,000 in direct investments, is intended to stimulate further investment in New Jersey’s innovation ecosystem by fostering the growth of early-stage companies and increasing the pool of available capital.
The funds may be used for product development, marketing, research and development, as well as other working capital requirements. This will extend investors’ capital support during this period of uncertain banking resources.
Finally, the NJEDA board will consider the creation of a $10 million emergency liquidity facility that will review requests for financial support from New Jersey-based businesses with deposits exceeding $250,000 at SVB.
This product is designed to provide affected businesses with a loan of up to $500,000 for a maximum of one year.
The programme approval will be discussed at a meeting of the Authority’s board scheduled for the following week.
Additional information will be provided prior to the board meeting.