New Jersey Provides Coronavirus Relief to Small Businesses

The Federal and State Government has set up avenues of relief to assist businesses in these hard times in the form of loans and grants.  Below is rundown of the New

Jersey Economic Development Authority (NJEDA) Small Business Emergency Assistance Grant Program, through which New Jersey is offering Coronavirus relief to small businesses.

 

What is it?

The Small Business Emergency Assistance Program has been set up to provide short-term, immediate and working capital support to New Jersey small and medium sized businesses that are dealing with restrictions or closures due to the COV-19 outbreak.  It was set up to help stabilize their operations and minimize furloughs/layoffs.  It has been set up to provide different offerings including grants, no-cost loans, loans through intermediaries and technical assistance.

 

What can these New Jersey Coronavirus relief funds be used for?

The funds may be used for payroll and working capital support.  The funds cannot be used for capital expenses, i.e, construction work.

 

Is my business eligible for the New Jersey Coronavirus relief?

Small and medium sized businesses and non-profits between one to ten full-time employees (“FTE”) that are facing COV-19 related furloughs/layoffs may be eligible.

An eligible business must have between one and ten FTEs reported on their New Jersey 4th Quarter 2019 WR-30 filing with the New Jersey Department of Labor and Workforce Development.

Non-employee companies, holding companies, companies that utilize 1099 employees (although these companies’ FTEs may be eligible), and larger firms are not eligible for this round of grant funding.

An eligible business must have a physical commercial location in New Jersey.  No home-based businesses are eligible for this round of grant funding.

An eligible business must operate in the following industries as defined by the business’s two-digit North American Industry Classification (“NAICS”) code: Retail; Accommodation & Food Services; Arts, Entertainment & Recreation; and Other Services (restricted to businesses with 3-digit NAICS of 811 and 812.)

An eligible non-profit with the following designations will also be permitted to receive grant funding: 501(c)(3), 501(c)(4), and 501(c)(7).

Prohibited businesses include but are not limited to: Gambling or Gaming Activities; The Conduct or Purveyance of “Adult” Activities, Services, Products or Materials; Any Auction or Bankruptcy or Fire or “Lost-Our-Lease” or “Going-Out-Of-Business” or Similar Sale; Sale By Transient Merchants; Christmas Tree Sales or Other Outdoor Storage; Any Activity Constituting a Nuisance; or Any Illegal Purposes.

To see whether your business qualifies, use the NJ COV-19 Business Support Eligibility Wizard.

 

How much can my business obtain through New Jersey’s coronavirus relief program?

Eligible businesses may receive $1,000 per FTE.

The minimum grant amount is $1,000 and the maximum grant amount  is $5,000 per application.

The calculation is based on the WR-30 filing from the most recent payroll period from date of application.  It is important to note that implied FTE calculations will be rounded to the nearest FTE.  Example 1: 2.24 FTEs would be counted as 2 FTEs for the program. Example 2: 2.50 or 2.75 FTEEs would be counted as 3 FTEs.

Small and medium sized businesses and non-profits, with more than one Employer Identification Number (“EIN”), can submit one application per EIN.

Small and medium sized businesses and non-profits with more than one location but only one EIN, will only be able to apply for a maximum of $5,000.

Explore how NJEDA determines grant size with its Grant Size Calculator.

 

Will my business get grant money through this New Jersey Coronavirus relief program?

Eligible businesses in need should apply.

However, NJEDA funding commitment totals $5,000,000 currently.  $3,000,000 of those funds are set aside to small sized businesses with five or fewer FTEs. These funds can be reallocated in the event the demand from small sized business is less than expected.

It is expected that the demand for these grants will exceed the total funding available.

Funding will be considered on a FIRST-COME FIRST-SERVE basis based on the DATE and TIME that NJEDA receives a complete application.

Therefore, the key is getting in the application on the first day that the NJEDA starts to accept applications — which is Friday, April 3, 2020.

 

When are applications due?

NJEDA starts to accept applications on Friday, April 3, 2020 at 9:00am and close April 10, 2020 at 9:00am.

 

 What does my business need to do?

The application is broken down to the following:

(1) The CEO/equivalent officer of the business that the business:

1. Will make a best effort not to furlough or lay off any individuals from the time of application through six months after the end of the declared state of emergency (SMEs that have already furloughed or laid off workers must make a best-effort pledge to re-hire those workers as soon as possible) – any material breach of its best efforts certification may result in the NJEDA seeking repayment of the grant;
2. Has been negatively impacted by the COVID-19 declared state of emergency on or after March 9, 2020 (e.g., has been temporarily shut down, has been required to reduce hours, has had at least a 20 percent drop in revenue, has been materially impacted by employees who cannot work due to the outbreak, or has a supply chain that has materially been disrupted and therefore slowed firm-level production); and
3. Has a material financial need that cannot be overcome without the grant of emergency relief funds at this time (e.g., does not have significant cash reserves that can support the SME during this period of economic disruption).

(2) The business must show that the business is registered to do business in NJ and is in good standing with the NJ Department of Labor and Workforce Development.  It will also require a certification from the applicant that it does not owe any taxes.

(3) The business must file an application.  A copy of the online grant application here.

 

Contact Us

Our business law attorneys can help advise business owners regarding the available federal and state loans and grants available as a result of COV-19.  To set up an appointment to speak with one of our attorneys, please call (973) 890-0004 or e-mail us though the contact form on this page.  We can help.