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Phase 3 of NJEDA Small Businesses Emergency Assistance Grant Program

On October 14, 2020, the New Jersey Economic Development Authority (“NJEDA”) announced Phase 3 of the NJEDA’s Small Business Emergency Assistance Grant Program. Pre-registration for eligible businesses for Phase 3 funding opens TODAY (October 19, 2020) and can be done on NJEDA.com.

Overview:

Phase 3 sets aside $70 million dollars for restaurants and micro-businesses, including nonprofits and home-based businesses with 50 or fewer full-time employees.

33% of the pools of funding will be directed to support entities in the above categories that are located in a census tract that was eligible to be selected as a New Jersey Opportunity Zone. The NJEDA is partnering with five leading marketing agencies to coordinate strategic outreach to these targeted communities. Tara Dowdell GroupMedina=CitiBrand Enchanting Media, and The Setroc Group, in partnership with Park Circle Technologies, were selected to support these outreach efforts based on their established connections to diverse communities across the state. All four firms are minority-, woman-, or veteran-owned.

Funding:

Phase 3 increases the amount of funding available to businesses. Grant awards will be calculated based on the number of full time employees.

  • Micro-businesses with 5 or fewer full-time employees and sole proprietorships will receive $5,000;

  • Businesses with 6-25 full time employees will receive $10,000; and

  • Businesses with 26-50 full time employees will receive $15,000.

The amount of the grant increases for businesses that are restaurants (NAICS code 722). Businesses in this classification with:

  • 5 or fewer full-time employees and sole proprietorships will receive $10,000;

  • 6-25 full time employees will receive $15,000; and

  • with 26-50 full time employees will receive $20,000.

To maximize the funding businesses’ receive, grant awards will be based on the peak full time employee count from a businesses’ past six quarters of WR-30 filings.

Funding to be fully disbursed as quickly as possible upon approval of grant application

Use of Funds:

Businesses must use the funds from the Program for reimbursement of lost revenue as a result of business interruption caused by COVID-19. Businesses may not use a grant for capital expenses.

Eligibility:

Businesses that were approved for grant funding under Phase 1 or Phase 2 of the Small Business Emergency Assistance Grant Program will be eligible for Phase 3 funding. Funding received in Phases 1 or 2 will not affect the award sizes these businesses are eligible to receive in Phase 3 (except to the extent prior grants reduced the business’s unmet need).

Eligible businesses must have a physical commercial location in the State of New Jersey (e.g., an office, a physical point of sales, a warehouse, manufacturing facility, etc.), and home-based businesses must be located in New Jersey. All non-profit entities organized under Internal Revenue Code section 501(c) will be eligible, with the exception of organizations whose primary activity is political lobbying.

Prohibited businesses include, but are not limited to: gambling or gaming activities; the conduct or purveyance of “adult” (i.e., pornographic, lewd, prurient, obscene or otherwise similarly disreputable) activities, services, products or materials (including nude or semi-nude performances or the sale of sexual aids or devices); any auction or bankruptcy or fire or “lost-our-lease” or “going-out-of-business” or similar sales; sales by transient merchants, Christmas tree sales or other outdoor storage; and, any activity constituting a nuisance; or any illegal purposes.

The CEO/equivalent officer of each eligible business must self-certify that the business:

  • Was in operation on February 15, 2020 (consistent with the federal Paycheck Protection Program implemented by the Small Business Administration);

  • 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 on March 9, 2020 (Businesses that have already furloughed or laid off workers from the time of application 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;

  • Has been negatively impacted by the COVID-19 declared State of Emergency on 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

  • 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 business during this period of economic disruption).

In addition, an eligible business must show evidence, at the time of application, that the business is registered to do business in the State of New Jersey, is in good standing with the New Jersey Department of Labor and Workforce Development, and meets the requirement by the Division of Taxation in the Department of Treasury to ensure that the applicant does not have tax debts due to the State. Evidence may be presented in the form of a certification by the applicant, subject to repayment if the certification is not correct.

Each eligible business may submit one application per Employer Identification Number (EIN) and, businesses with multiple locations but only one EIN will be limited to one application (under the sole EIN).

Finally, additional eligibility requirements may apply, which will be based on any applicable Federal requirements related to the Federal Coronavirus Aid, Relief, and Economic Security (CARES) Act, and may include, but not be limited to, a restriction on duplication of benefits that could exclude potential applicants that have already received Federal assistance, as well as a requirement that the applicant further demonstrate that it has had negative impacts from COVID-19.

Application Process:

To streamline the application process, the NJEDA is requiring all applicants to pre-register online. Applications will become available on a rolling basis following the pre-registration period. Pre-registered applicants will need to return to complete an application based on the following schedule:

  • Restaurants – 9:00 a.m. on Thursday, October 29, 2020

  • Micro businesses – 9:00 a.m. on Friday, October 30, 2020

  • All other businesses, excluding restaurants and micro businesses – 9:00 am on Monday, November 2, 2020

Applications for each category will be open for a period of one week and will be accepted on a first-come, first-served basis.

 

COPYRIGHT © 2020, STARK & STARKNational Law Review, Volume X, Number 293
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Rachel Lilienthal Stark Banking & Financial Services Attorney Stark & Stark Lawrenceville, NJ
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Rachel Lilienthal Stark is a Shareholder and member of the Banking & Financial Services, Business & Corporate, Intellectual Property and Non-Profit Organization Groups. Ms. Stark concentrates her practice in the representation of start-up and emerging companies and non-profit organizations on a variety of issues including corporate formation, financing, franchising, licensing, acquisitions, executive compensation, equity compensation plans, employment agreements, real estate and intellectual property law. Ms. Stark also represents lenders in commercial loan transactions.

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Dolores Kelley, Stark and Stark Law, Real Estate Lawyer, Zoning and Land Use Attorney, FDA Litigator
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Dolores R. Kelley is a Shareholder and member of Stark & Stark’s Business & Corporate, Real Estate, Zoning & Land Use and Beer & Spirits Groups, where she concentrates her practice in the representation of start-up and emerging companies, breweries, distilleries, and non-profit organizations on a variety of issues including corporate formation, financing, licensing, acquisitions employment agreements and intellectual property law. Dolores also handles a wide range of matters for the real estate industry, including commercial transactions, leasing, condominium and homeowner...

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