30 Days Late Suspends Forgiveness: Lakewood UEZ Sets New Rules For Business Loans
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Lakewood businesses that borrow from the township’s Urban Enterprise Zone could lose their loan forgiveness if they fall behind on payments, under a new policy from the Lakewood Development Corporation.
The policy covers the UEZ Business Low-Cost Expansion Loan, which forgives part of a loan when a business adds new full-time jobs. Under the new rules, any payment more than 30 days late counts as a default and suspends forgiveness.
Catching up is not enough on its own. After a first default, the borrower must make three on-time monthly payments in a row before forgiveness is restored. After a second default, it takes six.
A third default, or any payment more than 90 days late, ends eligibility for forgiveness, unless the LDC board approves an exception for documented hardship or a payment-processing error.
The forgiveness amounts stay the same: 50% of the remaining principal, up to $25,000, for two new full-time employees, or 25%, up to $12,500, for one. Forgiveness does not cover interest, late charges or legal fees, and every requirement must be met within the original five-year loan term.
The policy applies to new loans. Whether it applies to existing loans will be reviewed by LDC counsel, and the policy says it does not change existing loan agreements on its own.
