The New Jersey Economic Development Authority (NJEDA) has available several different economic stimulus programs for New Jersey small businesses (for profit and non-profit). Although different, these programs have numerous requirements in common. These opportunities are in addition to the programs offered by the Federal Small Business Administration.
Small Business Emergency Assistance Grant Program offers NJ employers with 1 – 10 full-time employees (FTEs) non-repayable grants of up to $5,000, calculated at $1,000 per FTE (as of 4Q 2019) to be used for unrestricted payroll and working capital support; but not capital expenses, or construction. Businesses are not eligible if they have too many or no employees, and cannot include 1099 workers as employees. Only businesses in one of the following industries qualify for the grant: retail; accommodation & food services; arts, entertainment & recreation; repair & maintenance of products & equipment, personal care & laundry services (all as defined by NAICS). On-line grant applications are currently available.
NJEDA Small Business Emergency Assistance Loans provide direct loans of up to $100,000 to NJ-based small businesses and non-profits organizations in existence for at least one-year, with less than $5M in annual revenue, which can show a global debt service coverage ratio of 1.00 (as of 12/3/19). This program provides low-cost and flexible terms, such as 10-year term and amortization, 0% interest (years 1-5), NJEDA’s prevailing interest rate (max of 3.0% years 6-10), deferred repayments for 12 months. On-line loan application becomes available April 13, 2020 at 9:00 a.m.
NJEDA Small Business Emergency Assistance Guarantee Program provides 50% guarantee, not to exceed a total NJEDA exposure of $100,000 to Premier Lenders which issue working capital loans or lines of credit to support business continuity for a range of COVID-19 related impacts to businesses (reduced revenue, employee shortage, supply chain impact, etc.). Eligible businesses must have been in existence for at least one full year and have $5 million or less in annual revenue. Applications are submitted to a designed “Premier Lender” listed on the NJEDA website (link below).
Common Qualifications – To qualify for any of these programs, the business must have a physical commercial location and be registered to do business in NJ, be in good standing with NJ DOL, have paid all taxes, and must be able to show negative impact based on COVID-19 on or after 3/9/2020 (e.g., temporary shutdown, reduced hours, 20%+ drop in revenue, materially impacted by employees able to work, government shutdown, or material supply chain disruption). Also, the CEO/equivalent officer must self-certify the firm will make a best effort not to furlough or lay off anyone from time of application through 6 months after declared state of emergency ends, and/or to rehire furloughed or laid off workers as soon as possible. Neither program has an application fee.
Common Disqualifications – Home-based business are not eligible for either program, nor are businesses related to: gambling or gaming activities; providing “adult” activities, services, products or materials; auction or bankruptcy or fire or “lost-our-lease” or “going-out-of-business” or similar sale; traveling merchants; Christmas tree sales or other outdoor storage; any activity constituting a nuisance; or any illegal purpose under NJ law.
NJEDA Entrepreneur Guarantee Program provides guarantees of up to 80% of the total investment amount, not to exceed $200,000 per NJ entrepreneurial company. Specific requirements are eligibility criteria are listed on the NJEDA website (link below).
Additional information about all of these program is available through the NJEDA site at: https://bit.ly/2JJuOSP. To see whether you qualify for any of these programs, use this link to the NJ COVID-19 Business Support Eligibility Wizard
Please do not hesitate to reach out to one of our seasoned attorneys who will guide you through any questions or concerns you may have related to your operations.