A Guide To Coronavirus Relief Programs For Small Businesses In NJ
The grants and loans announced by the New Jersey Economic Development Authority will open applications on Friday and are set to close April 10. Here’s a guide to New Jersey small business assistance.
New Jersey and the federal government have launched new assistance programs for small and medium sized businesses in recent weeks to help keep them above water during the coronavirus crisis.
Below is a guide that outlines grants, loans, hiring guides and more to help small business owners navigate the various aid packages and where they can apply. New Jersey also launched an “Eligibility Wizard” program that lets you see what program fits your business’ needs, as well as a calculator to estimate the size of the grant you could earn. You can visit that here.
The grants and loans announced last week by the New Jersey Economic Development Authority will open applications on Friday, April 3 at 9:00 a.m. and will close April 10 at 9:00 a.m., but may have to close before then depending on how many businesses apply. The applications will be posted on New Jersey’s coronavirus business information hub at cv.business.nj.gov.
For more questions, you can visit cv.business.nj.gov or call the Economic Development Authority at 609-858-6767.
Small business loans
Low-interest disaster loans
Small businesses and nonprofits can apply for up to $2 million disaster loans with a 3.75% interest rate from the U.S. Small Business Administration. The loans are supposed to help businesses with financial obligations and operating expenses they could have met if the coronavirus pandemic did not occur.
Small business owners losing revenue can apply for an advance of up to $10,000 that will be made available within three days of a complete application under the Economic Injury Advance Program. This advance won’t have to be repaid, according to the SBA. You can apply for the advance here.
Applications will be accepted through Dec. 18. For more information, visit the Small Business Administration website, call 1-(800) 659-2955 or email [email protected]. Apply online or see if you qualify here.
Paycheck Protection Program
Small businesses with less than 500 employees are eligible for up to $10 million forgivable loans. If employees are kept on the payroll for eight weeks, the Small Business Administration will forgive loans used for payroll costs, mortgage interest payments, rent and utilities. The program is meant to incentivize businesses that keep employees on payroll or restore payrolls after the crisis.
Loans can be up to two and a half times the borrower’s average monthly payroll costs up to $10 million with an interest rate no higher than 4%.
Businesses in the food sector with less than 500 employees per physical location are also eligible. Self-employed individuals, independent contractors and sole-proprietors are also eligible. Your company must have been in business as of Feb. 15.
For more information, visit the Small Business Administration’s website, email [email protected] or call at 1-800-827-5722. To apply, first understand if your bank is an SBA-approved lender. If your bank is not, contact the SBA to find an approved lender.
Community Development Finance Institution (CDFI) Emergency Loan Loss Reserve Fund
This $10 million capital reserve fund will take a first loss position on CDFI loans that provide low-interest working capital to small and micro-businesses. The institutions will be able to withstand defaults due to the outbreak so they can provide more loans at lower interest rates to microbusinesses affected by the outbreak, the agency said.
Each community development finance institution must fit within certain loan guidelines: Loans can’t exceed $75,000, interest rates must be lower than 3.75% and can’t exceed five years.
For more information, visit the state’s business help page.
New Jersey Entrepreneur Support Program
This $5 million program will provide 80% loan guarantees for working capital loans to start-up entrepreneurs.
The business must have less than 25 total employees, less than $5 million in revenue, a corporate headquarters in New Jersey and at least half of its employees in New Jersey. The entrepreneur company must be in manufacturing, information technology, life sciences, finance and insurance, clean energy, food and beverage, advanced transportation, or film and digital media.
For more information, visit the state’s business information page.
Small Business Emergency Assistance Guarantee Program
This $10 million program will provide 50% guarantees not to exceed $100,000 on working capital loans and waive fees on loans made through institutions participating in the NJEDA’s existing Premier Lender or Premier CDFI programs. It will also provide a 50% guarantee for lines of credit to cover reduced revenue, employee shortage, supply chain hits or other COVID-19 related impacts.
For more information and a list of participating institutions, visit the state’s website.Contact your premier lender to participate.
Families First Coronavirus Response Payroll Tax Credit
Under the federal Families First Coronavirus Response Act, starting April 1, employers that keep employees on their payroll will receive a “100% dollar-for-dollar payroll tax credit.”
The payroll tax credit “immediately and fully reimburses employers with fewer than 500 employees by allowing them to reduce their federal payroll taxes by the amount they spent on emergency leave,” according to the state Department of Labor.
Visit the U.S. Department of Labor website or the Internal Revenue Service website for more information.
Worker Retention Tax Credit
If businesses and nonprofits suspended or partially suspended their operations, they can receive a refundable payroll tax credit for part of the wages paid to eligible employees under the federal CARES Act.
This article will be updated when application information becomes available.
You cannot claim unemployment benefits if you are an officer of a corporation, or own more than 5% equitable or debt interest in the corporation, according to the state Department of Labor. You can learn more about who is eligible here.
However, you may be entitled to benefits if you run a part-time business while also being employed full-time and you lose your full-time job. The part-time business income would be deducted from your partial weekly benefit rate, a part of the formula to collect benefits.
If you permanently stop operations and file for formal dissolution or bankruptcy, you may qualify for unemployment. You would need to provide the state with one or more documents:
– A signed statement from the corporation verifying the termination of corporate officer status
– A copy of the Tax Clearance Certification and a copy of the application for final dissolution
– Deed of assignment of assets for the benefit of creditors
– A copy of a petition to bankruptcy court under Chapter 7
Small Business Emergency Assistance Loan Grants
This $5 million program will provide grants up to $5,000 to small and medium sized businesses or nonprofits in retail, arts, entertainment, recreation, accommodation, food service, and other services, such as repair, maintenance, personal, and laundry services.
Businesses with between one and ten full time employees can apply for this grant funding to be used as unrestricted payroll and working capital support. There is $5 million available, with $3 million set aside for businesses with five full time employees or fewer.
The CEO must certify the business will make a best effort to not lay off or furlough any individuals during the public state of emergency or six months after. If they already laid off or furloughed workers, the business must pledge to rehire them as soon as possible.
For more information, visit the state’s FAQ.
CDFI Emergency Assistance Grant Program
The $1.25 million program will provide grants of up to $250,000 to CDFIs so they can scale operations or reduce interest rates for the duration of the outbreak.
For more information, visit the state’s business help page.
The Manufacturing Extension Program offers $1.25 million for small- and medium-sized manufacturers under the federal CARES Act.
This article will be updated to include application information once it is available.
Emergency Technical Assistance Program
This $150,000 program will support technical assistance to New Jersey-based companies applying for assistance through the U.S. Small Business Administration.
The New Jersey Economic Development Authority announced four organizations that will assist businesses with their applications: African American Chamber of Commerce of New Jersey (AACCNJ), New Jersey State Veterans Chamber of Commerce, Rising Tide Capital and the Statewide Hispanic Chamber of Commerce of New Jersey (SHCCNJ).
Gov. Phil Murphy announced that six large banks and 40 state and federally chartered institutions and credit unions would offer a 90-day grace period for mortgage payments, but it only applies to residential mortgage loans.
Tim Sullivan, the CEO of the Economic Development Authority, said Tuesday that most of the EDA financial assistance programs can be used for rent.
The programs were envisioned to primarily cover “payroll, debt service or keeping current on loans, and keeping current on your rent. The overall goal of everything we’re trying to do here is stabilization,” Sullivan said.
Companies taking own measures
Some companies have chosen to offer relief voluntarily. Prudential waived April rent for its retail tenants in Newark that the state mandated closed or restaurants that can still provide takeout and delivery. Prudential serves as landlord to 21 storefronts.
If you are an essential business that needs more workers, you can post your job openings that will appear on New Jersey’s job portal at jobs.covid19.nj.gov.
Submit the job posting by filling out a form at jobs.covid19.nj.gov/intake.