NJEDA Providing Additional Funds to Support Small Businesses Impacted by COVID-19

NJEDA Providing Additional Funds to Support Small Businesses Impacted by COVID-19

The New Jersey Economic Development Authority (NJEDA) recently announced that it is expanding its Small Business Emergency Assistance Loan Grant Program, which was created to help support small businesses impacted by the coronavirus (COVID-19) pandemic. The $50 million expansion, which will rely on funding provided under the CARES Act and will provide grants up to $10,000 to a wider range of businesses, including home-based businesses and sole proprietorships. In addition, $15 million will be reserved for businesses in Opportunity Zone-eligible census tracts.

“COVID-19 has created an unprecedented crisis for New Jersey’s small businesses. From the start, the NJEDA has worked tirelessly to support business owners and their employees, but it quickly became clear that the scope of the challenges this virus presents went far beyond what we could address with our resources alone,” NJEDA Chief Executive Officer Tim Sullivan said in a press statement. “This much-needed federal assistance will allow us to support thousands of additional businesses that were not eligible for the first round of grants with a particular focus on firms in the most at-risk communities.”

Small Business Emergency Assistance Loan Grant

The NJEDA’s Small Business Emergency Assistance Grant Program initially launched on April 3, 2020. Within the first hour, the program was oversubscribed. In total, the NJEDA received more than 30,000 applications.

The NJEDA is now adding a second round of funding to the program. At the same time, it is also expanding access to additional New Jersey small businesses. Your organization will be eligible if:

• You have 25 or fewer full-time employees, as reported on most recent WR-30 filing with the New Jersey Department of Labor
• You have a physical commercial location in the State of New Jersey
• You are a Home-based business based at a home located in New Jersey
• You are a non-profit organized as a 501(c)(3), 501(c)(4), or 501(c)(7) organization
• Your business is registered to do business in the State of New Jersey; does not have any outstanding tax liabilities; and is in good standing with the New Jersey Department of Labor

Businesses will receive $1,000 per full-time employee (FTE), up to a maximum of $10,000. Sole proprietorships or other companies with no full-time employees will receive the minimum grant amount ($1,000). Businesses may use the funds to reimburse revenue lost as a result of a business interruption caused by COVIDi19. Funding can’t be used for capital expenses, including construction.

As part of the application, the business’s Chief Executive Officer or equivalent officer must certify that the company was in operation on February 15, 2020, has been negatively impacted by the COVID-19 outbreak, and will make its best effort not to furlough or lay off any employees. To comply with the duplication of benefits provisions within the Stafford Act, all applicants will also be required to fill out an affidavit identifying all funding previously received related to COVID-19, including Small Business Administration loans and grants, forgivable portions of Payroll Protection loans, and Economic Injury Disaster grants.

Applicants on the oversubscribed list for Phase 1 are encouraged to apply for the expanded second round program. According to NJEDA, applications for Phase 2 of the Small Business Emergency Assistance Grant Program will be available soon. The NJEDA has also established a process for corporate and philanthropic partners to make donations to expand the Program. Gifts to support the Small Business Emergency Assistance Grant Program must be at least $100,000. The gifts must be unrestricted and without conditions. To avoid conflicts of interest, donors must have no existing contracts with the NJEDA and may not enter into a contract with the Authority for at least six months following the donation. This includes tax incentive agreements, financial assistance, bond contracts, leases, and other contracts.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Ashley Brinn, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.