New Jersey Law

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COVID-19 UPDATE: NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY PROGRAMS TO HELP BUSINESSES

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The New Jersey Economic Development Authority (NJEDA) Board has acted to help New Jersey businesses and workers in response to the coronavirus (COVID-19) crisis. The NJEDA recently approved several new programs “designed to support businesses and workers facing economic hardship due to the outbreak of the novel coronavirus COVID-19”.

The package includes grants for small business, no-interest loans for mid-size companies, financial help for private-sector lenders and Community Development Financial Institutions (CDFIs), funding for New Jersey entrepreneurs, and resources that provide technical support and marketplace information.

The programs will collectively provide $75 million or more of financial support to New Jersey businesses and workers. The NJEDA programs are intended to supplement aid to be received from the federal government to businesses and workers resulting from the current crisis.

There are two specific forms of relief.

First, the law authorizes the NJEDA to issue grants from the Economic Recovery Fund to help companies to keep their operations running smoothly, as they suffer possible declines in revenue. The grants may be used for designing, acquiring, planning, constructing, reconstructing, equipping, furnishing and improving various types of projects, and may also include grants for payroll and working capital.

As part of this authority, the NJEDA has approved the following new grant and loan initiatives, as posted recently on its website: Small Business Emergency Assistance Grant Program
A $5 million program that will provide grants up to $5,000 to small businesses in retail, arts, entertainment, recreation, accommodation, food service, and other services – such as repair, maintenance, personal, and laundry services – to stabilize their operations and reduce the need for layoffs or furloughs.

Small Business Emergency Assistance Loan Program
A $10 million program that will provide working capital loans of up to $100,000 to businesses with less than $5 million in revenues. Loans made through the program will have ten-year terms with zero percent for the first five years, then resetting to the EDA’s prevailing floor rate (capped at 3.00%) for the remaining five years.

Community Development Finance Institution (CDFI) Emergency Loan Loss Reserve Fund
A $10 million capital reserve fund to take a first loss position on CDFI loans that provide low interest working capital to micro businesses. This will allow CDFIs to withstand loan defaults due to the COVID-19 crisis, which will allow them to provide more loans at lower interest rates to microbusinesses affected by the outbreak.

CDFI Emergency Assistance Grant Program
A $1.25 million program that will provide grants of up to $250,000 to CDFIs to scale operations or reduce interest rates for the duration of the COVID-19 crisis.

NJ Entrepreneur Support Program
A $5 million program that will encourage continued capital flows to new companies, often in the innovation economy, and temporarily support a shaky market by providing 80% loan guarantees for working capital loans to entrepreneurs.

Small Business Emergency Assistance Guarantee Program
A $10 million program that will provide 50% guarantees on working capital loans and waive fees on loans made through institutions participating in the NJEDA’s existing Premier Lender or Premier CDFI programs.

Emergency Technical Assistance Program
A $150,000 program that will support technical assistance to New Jersey-based companies applying for assistance through the U.S. Small Business Administration.

Second, the legislation provides the NJEDA with the discretion to grant to businesses that have been given tax incentives pursuant to its Grow NJ job creation and retention incentive program, up to two additional six-month extensions of time to file the required project completion certificate. The company must demonstrate that the project completion delays are a result of the economic disruptions caused by the COVID-19 pandemic.

To speak to an NJEDA representative about any of these programs, you can call 866-534-7789 or go to the NJEDA website, www.njeda.com, to request that a representative contact you.

A summary of the programs can be found here.

Additional details on the NJEDA’s new programs, including complete eligibility requirements and a new “Eligibility Wizard” for businesses can be found through the State’s COVID-19 Business Information Hub. The Eligibility Wizard provides information on which grants and loans to apply for.

We are able to answer any questions that you may have regarding any of these programs. Therefore, please feel free to reach out to either Richard R. Ahsler at rahsler@newjerseylaw.net, Jeffrey B. Lehrer at jlehrer@newjerseylaw.net, or Michael Marcus at mmarcus@newjerseylaw.net, or call us at 908-757-7800, for an analysis of these NJEDA programs.

DiFrancesco, Bateman, Kunzman, Davis, Lehrer & Flaum PC (http://www.dbnjlawblog.com) is a full service law firm in New Jersey which provides a broad range of legal services.

The information contained in this blog is intended solely for informational purposes; it is a advertising publication of DiFrancesco, Bateman, Kunzman, Davis, Lehrer & Flaum P.C.This publication is intended to alert recipients of developments in the law and is not intended to provide legal counsel, advice or opinion on any specific facts or circumstances. The contents are intended as general information only. You are urged to consult a member of this firm or your own attorney concerning your particular situation and any specific legal questions you might have.