New Jersey to Provide Support to Businesses Affected by SVB Crisis
March 15, 2023
Programs will provide approximately $35 million in short-term support for New Jersey companies impacted by Silicon Valley Bank
In response to Silicon Valley Bank’s (SVB) collapse last week, Governor Phil Murphy announced that the New Jersey Economic Development Authority (NJEDA) will be opening, and launching, a series of programs designed to provide emergency assistance to New Jersey-based companies banked by SVB.
Specifically, this package of assistance includes the re-opening of the NJEDA’s Entrepreneur Support Program, the launch of the NJEDA’s Angel Match Program and the scheduling of a special board meeting for consideration of an emergency liquidity facility. All programs will provide necessary financial support for companies experiencing liquidity challenges due to the SVB collapse and are designed to help companies meet payroll, pay rent and continue their day-to-day operations.
Funded at $5 million, the New Jersey Entrepreneur Support Program offers a guarantee to support 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 particularly crucial. It provides an NJEDA guarantee of up to 80 percent for an eligible new loan or convertible note by a qualified investor into a New Jersey qualified business, not to exceed a $200,000 guarantee per company.
Funded at $20 million, the Angel Match Program will help early-stage businesses bridge funding gaps as they scale their operations and refine their products. The program, which will match up to $500,000 in direct investments, is designed to fuel the growth of early-stage companies while increasing the pool of available capital, stimulating further investments into New Jersey’s innovation ecosystem. The funding may be used for product development, marketing, research and development, and other working capital needs. This will extend the capital support from investors during this time of uncertain banking resources.
Finally, the NJEDA board will consider the creation of a $10 million emergency liquidity facility that will review financial support requests for New Jersey-based companies with over $250,000 in deposits at SVB. This product is anticipated to support impacted companies with a loan of up to $500,000 to provide short-term financing options for at most 12 months. The Authority’s board will consider the program approval at a board meeting to be scheduled in the coming week. Further details will be announced prior to the board meeting.