$35M Marked For NJ Entrepreneurs Affected By Bank Crises: Murphy

This story has been updated to reflect the governor's comments about Signature Bank.

NEW JERSEY — Gov. Phil Murphy said the state will offer $35 million in programs to give emergency assistance to New Jersey-based businesses affected by two recent bank failures.

On Sunday, Murphy announced that the New Jersey Economic Development Authority (NJEDA) is re-opening one program and launching another to provide short-term support to businesses who are having liquidity problems. This was originally offered to NJ entrepreneurs with investments in California-based Silicon Valley Bank; Murphy said Monday that the assistance programs would also be offered to businesses serviced by New York-based Signature Bank, as well.

"By offering this suite of programs for New Jersey entrepreneurs impacted by the SVB and Signature collapses, we will continue to keep residents employed and support companies that are vital to our innovation ecosystem and our economic future," the governor said.

Silicon Valley, the nation's 16th largest bank, failed after depositors — mostly technology workers and venture capital-backed companies — began withdrawing their money as anxiety about the bank's situation spread last week. It was the second-largest bank failure in U.S. history, and the collapse this weekend of Signature Bank became the third-largest.

The only larger bank failure in U.S. history is the 2008 failure of Washington Mutual.

The governor said the NJEDA will re-open the New Jersey Entreprenuer Support Program, which is funded at $5 million; and also begin a $20 million “Angel Match Program” to help companies in early stages of growth. Related article — Silicon Valley Bank Seized By FDIC As Depositors Pull Cash

Murphy also said the NJEDA board will consider creating a $10 million emergency liquidation facility “that will review financial support requests for New Jersey-based companies with over $250,000 in deposits at SVB."

The Authority's board will consider approving this program, which would support impacted companies with a loan of up to $500,000 and provide financing for no more than 12 months.

The assistance programs "are designed to help companies meet payroll, pay rent, and continue their day-to-day operations," said Murphy's office and the NJEDA in a joint statement Sunday.

The Angel Match program launched Monday at 9 a.m. and the Entrepreneur Support Program will launch Wednesday, March 15, according to officials.

Here is what's planned and already in place, according to the governor and NJEDA:

• $5M NJ Entrepreneur Support Program: offers guarantee to support repayment of an investor loan advanced for working capital programs to encourages investors to support businesses within their portfolios. "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. "
• $20M Angel Match Program: designed to help early-stage businesses bridge funding gaps. "Matches angel investors’ direct investment in early-stage, product-based technology companies within targeted industries on a 1-to-1 basis with unsecured convertible notes ranging from $100,000 to $500,000."
• $10M Emergency Liquidation Facility (proposed): Would review requests for financial support from NJ-based companies with more than $250,000 in deposits in 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."