April 6, 2020
The $5 million dollars in aid for small businesses to cope with the COVID-19 pandemic has been depleted. The New Jersey Economic Development Authority (NJEDA) ran out of money early on Friday, April 3 for its $5 million
Small Business Emergency Assistance Grant Program
nearly one hour after it started accepting applications.
NJEDA is still encouraging small businesses to apply for the grant in case more funds are made available. As states in the
application page
: “Funding is subject to Program Funds availability. Due to high demand, this funding is exhausted, but submitting your application will ensure that if additional funds become available for this round of Grant funding, you may be eligible. Applications will be reviewed based on first come, first submitted basis.”
According to NJEDA Chief Executive Officer Tim Sullivan, more than 10,000 applications were submitted by 10:16 AM. By 1:30 PM, that number grew to 16,000.
Grant approvals will be announced early next week, with checks to be electronically deposited by later in the week, Sullivan said.
Governor Murphy authorized the NJEDA to make $5 million available to help smaller businesses that have either closed or will close soon as their customer base and revenues plummet amid the outbreak. Businesses with up to 10 employees are eligible, and grants vary in size from $1,000 to $5,000.
NJEDA plans to award between 1,000 and 2,000 grants, depending on how many employees are at each company. Applicants will be wait-listed to receive a grant if more money is made available on a first come first come first serve basis. Small business owners can submit an applications through 9:00 AM on April 10. The NJEDA may decide to stop accepting applications earlier than Friday.
The
Small Business Emergency Assistance Loan Program is a $10 million pool of money that provides loans of up to $100,000 a year for companies with revenue up to $5 million a year. To see whether you might qualify for this program, use the NJ COVID-19
Business Support Eligibility Wizard. The Small Business Emergency Assistance Loan program is designed to provide a direct loan of up to $100,000 to NJ-based small businesses and non-profit organizations that have been in existence for at least one-year and have less than $5 million in annual revenue. These businesses must have been negatively impacted by the COVID-19 outbreak (including, but not limited to: reduction of business hours, complete closure of business, at least a 20% decline in revenue, employees unable to work, required to close by government, or disruption of supply chain).
You may be eligible for the Small Business Emergency Assistance Loan Program if you:
- Have a physical commercial location in the State of NJ. Home-based businesses are not eligible for this program. A home-based business is a business operated out of a residential property where commercial activity is not zoned to take place.
- Have been in existence for at least one year
- Have less than $5M annual revenue
- Can show a global debt service coverage ratio of 1.00 (as of December 31st, 2019)
- Are able to demonstrate negative impact related to COVID-19 on or after March 9th, 2020
- Are registered to do business in the State of NJ
- Must certify that the company is in good tax standing with the State
- Are in good standing with the Department of Labor and Workforce Development, with all decisions of good standing at the discretion of the Commissioner of the Department of Labor and Workforce Development
- Are able to provide a CEO certification that the firm will make its best-effort to not lay off employees or will re-hire employees as soon as possible
- Non-profit organizations are eligible for this program; eligible non-profits must have status of 501(c)(3), 501(c)(4), 501(c)(7)
Types of businesses not eligible:
- Related to gambling or gaming activities
- Related to the purveyance of “adult” (i.e., pornographic, lewd, prurient, obscene) activities, services, products or materials (including nude or semi-nude performances or the sale of sexual aids or devices)
- Auction or bankruptcy or fire or “lost-our-lease” or “going-out-of-business” or similar sale
- Traveling merchant
- Christmas tree sales or other outdoor storage
- Any other activity constituting a nuisance
- Illegal under the laws of the State of New Jersey
This program is structured specifically for entities facing economic challenges due to COVID-19 and provides low-cost and flexible terms, such as:
- 0-year term and amortization
- 0% interest rate (years 1-5), NJEDA’s prevailing interest rate floor (capped at 3.0% years 6-10)
- Deferred repayments for 12 months
There are no fees associated with the Small Business Emergency Loan Program for the first five years of the loan, including application fees, and then standard modification fees will apply.
A sample application will be available sometime today and the application will go live a week later on April 13, which Sullivan said will grant businesses time to properly prepare submissions
.
Click here
for information on assistance for small and mid-size businesses in NJ.
The grant and loan programs are part of a larger $40 million state aid from the NJEDA, which includes loans and loan guarantees, and hundreds of billions of dollars in grants, low-interest and forgivable loans, and other tax credits.
The U.S Small Business Administration’s applications went live for its $349 billion of COVID relief loans on Friday as well.
We will share more details as they become available. Please visit our
COVID-19 Resource Page
for more updates.
Feel free to contact any member of our team at (610) 828-1900 (PA) or (732) 341-3893 (NJ) with questions. Rich Higgins, CPA, managing principal – New Jersey office can be contacted at
Richard.Higgins@MCC-CPAs.com
. I can be reached at
Marty.McCarthy@MCC-CPAs.com
. As always, we are happy to help.
Stay safe,
Marty McCarthy, CPA, CCIFP
Managing Partner
McCarthy & Company
Source: NJBIZ and NJEDA
Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).
