With new COVID-19 developments being discussed nationally every day, it can be easy to overlook the relief and changes being made right here in the Garden State. To help you keep track of New Jersey’s response to the pandemic’s impact on businesses, employees and residents, our advisors have compiled the major announcements coming out the New Jersey Economic Development Authority (NJEDA), NJ Department of Labor & Workforce Development and other government agencies.
Governor Murphy and lawmakers confirmed last week that the state will comply with the deferred federal tax filing and payment deadline. All state income tax and corporate business tax returns normally due on April 15, 2020 are now due and payable by July 15, 2020.
Small Business Relief
NJEDA’s Small Business Emergency Assistance Loan program will begin accepting applications on April 13, 2020. Eligible small businesses and nonprofits can apply for a direct loan of up to $100,000 with a 10-year term. No fees or interest will be charged for the first five years of the loan, after which the interest rate will be capped at 3.0% for years 6-10.
To qualify, a small business or nonprofit must have:
- A physical commercial location in NJ (home-based businesses are not eligible)
- Been in existence for at least one year
- Less than $5 million in annual revenue
- Been negatively impacted by the COVID-19 outbreak (i.e., 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)
Organizations applying for the loan program must certify that they are in good standing with the state and the Department of Labor and Workforce Development and that they will make a best effort to retain or rehire employees. The NJEDA will make the applications available online prior to the application start date to help businesses prepare.
Relief for Entrepreneurs and Startup Investors
In the coming weeks, the NJEDA will be launching the NJ Entrepreneurship Guarantee Program, which will guarantee up to 80% of an investor loan made to a NJ-based entrepreneurial business, not to exceed $200,000 per entrepreneurial company.
Eligible entrepreneurial businesses must fall under one of the following sectors: advanced manufacturing, information/technology, life sciences, finance and insurance, clean energy, food and beverage, advanced transportation, food and beverage, film and digital media. The business must be in good standing with the state and have:
- A minimum of 50% of employees in NJ
- Less than 25 total employees at the time of application
- Under $5 million in revenues
- Corporate headquarters in New Jersey
- Relief for Community Development Financial Institutions
In addition, the NJEDA established a CDFI Emergency Assistance Grant Program for NJ-based Community Development Financial Institutions (CDFIs) that have been in existence for at least 10 years. Each eligible CDFI can qualify for up to $250,000 in grant funds and will have up to 12 months to utilize the funds.
NJEDA Eligibility Wizard
Businesses can use the NJEDA’s Emergency Assistance Eligibility Wizard tool to determine which NJ and SBA emergency funding they might be eligible for based on the business information they provide.
NJEDA Loan Payment Moratorium
The NJEDA is also offering a 3-month payment moratorium on existing loans and waiving late fees for businesses in good standing that can demonstrate negative impact on their businesses from COVID-19.
While business mortgages in NJ are not eligible for relief, many of the state’s financial institutions are offering a 90-day forbearance period and fee waivers for residential mortgage holders impacted by the COVID-19 pandemic. Click here for more information and a list of participating financial institutions.
The New Jersey Pandemic Relief Fund and foundations throughout the state are activating emergency grants to help New Jersey’s nonprofit organizations continue to serve their communities during and after the COVID-19 pandemic. Contact our Grant Compliance specialists for assistance.
Employees and employers alike should be aware of the state-level paid sick leave, family medical leave and unemployment benefits that NJ law provides in addition to the expanded federal benefits in the Families First Coronavirus Response Act. The New Jersey Department of Labor & Workforce Development has issued a guide to COVID-19 Scenarios & Benefits for easy comparison and application of federal and state requirements.
Federal Assistance for NJ Businesses
Governor Murphy applied for and received “disaster status” that allows New Jersey businesses with fewer than 500 employees to apply for Economic Injury Disaster Loans through the U.S. Small Business Administration, on top of the Paycheck Protection Loan Program available under the Coronavirus Aid, Relief and Economic Security (CARES) Act. Read this FAQ from Grassi’s Emergency Loan Consultants to learn more about both federal assistance programs.
Applying for federal programs may affect your eligibility for relief from the state, so businesses should keep all options in mind and proceed strategically when applying for emergency funds.