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A Conversation with the New Jersey Economic Development Authority (NJEDA) Chief Executive Officer (CEO) Tim Sullivan Webinar
Today, the New Jersey Business and Industry Association(NJBIA), the New Jersey State Chamber of Commerce (NJCC),and the Commerce and Industry Association of New Jersey (CIANJ) held a webinar to have a conversation with New Jersey Economic Development Authority (NJEDA) Chief Executive Officer (CEO) Tim Sullivan on the new initiatives to support businesses impacted by COVID-19.
Michele Sikera, the Chief Executive Officer (CEO), the New Jersey Business and Industry Association (NJBIA), said that there were over 5,000 registrants for today’s webcast. She also said that they appreciate Governor Phil Murphy (D) and his administration’s ability to move quickly to address the concerns of the state’s businesses.
Tom Bracken, the Chief Executive Officer (CEO), the New Jersey State Chamber of Commerce, said that the recent actions taken by the New Jersey Economic Development Authority (NJEDA) shows their desire to help the state’s business community.
Tim Sullivan, the Chief Executive Officer (CEO), the New Jersey Economic Development Authority (NJEDA), said that COVID-19 is a public health crisis. He also said that:
Right behind the public health crisis, is the economic crisis facing the state’s business community;
The NJEDA understands the anxieties facing the state’s business owners and they are sympathetic to the challenges they are facing;
They developed their strategies using three (3) core principle:
Getting funding into the market as soon as possible;
Leveraging federal, private and philanthropic capital; and
Providing a suite of compatible offerings to help address varied marketplace needs.
Last week, the NJEDA announced a five-prong program to help the state’s businesses; and
The Small Business Emergency Assistance Grant Program;
The Small Business Emergency Assistance Loan Program;
Programs to mobilize capital to micro-, small and medium-sized businesses;
Providing technical support; and
Credit flexibility to support businesses.
In total, their program allocates $40 million in funding and they believe that they can possibly stretch the funding by leveraging resources to as large as $75 million.
Small Business Emergency Assistance Grant Program Overview:
CEO Sullivan said that this program is targeted at the most affected businesses and is funded at a rate of $5 million. He also said that:
The program offers an operating expense grant of up to $5,000 to small businesses with 1-10 full-time employees in highly impacted industries;
The eligible industries include retail, accommodation and food service, arts, entertainment, etc.;
Eligibility is determined using the North American Industry Classification System (NAICS) codes for businesses;
Eligible applicants must have a physical location in New Jersey;
The application window will open on Friday, April 3, 2020 at 9:00 AM and will close on Friday April 10, 2020 at 9:00 AM; and
Grant size will be determined using quarter 4 (Q4) salaries.
Small Business Emergency Assistance Loan Program Overview:
CEO Sullivan said this program will award up to $100,000 working capital loans for up to 10 years for businesses with $5 million or less in revenue. He also said that:
The first five (5) years of the loan will have a zero-percent interest rate, while the next five (5) years will have an interest rate of one to three percent; and
Eligible companies must be physically located in New Jersey, have existed for one (1) year, have a minimum global debt service of 1.0 based on the year prior to the declaration of emergency, and other conditions, including a minimum credit score of 600 for at least one guarantor.
Programs to Mobilize Capital to Micro-, Small, and Medium-Sized Businesses Overview:
CEO Sullivan said that this program offers a $10 million capital reserve fund for first-loss position, up to 50 percent, on CDFI loans that provide low or no-interest loans to micro and small businesses. He also said that:
Eligible businesses must have a federally certified, New Jersey-based CDFI, and have the operational and financial capacity to use the guarantee effectively, etc.;
There is also the Emergency Assistance Guarantee, which has been expanded for purposes of the emergency by providing $100,000 maximum guarantee, 50 percent guarantee of working capital loans that take the first loss position at no fees;
The initial wave of funding for the Emergency Assistance Guarantee is $10 million;
There is also the New Jersey Entrepreneur Support Program, which will provide 80 percent loan guarantees for working capital loans to start-up entrepreneurs; and
The initial wave of funding for this program is $5 million, and eligible businesses must be based in New Jersey and have a revenue under $5 million with less than 25 employees.
New Jersey Technical Assistance Support Overview:
CEO Sullivan said that this initiative will be funded at $150,000 to help businesses navigate the application process for Small Business Administration (SBA) funding programs.
Credit Flexibility to Support Businesses Overview:
CEO Sullivan said that the NJEDA will be as flexible as possible with their partners to provide payment moratoria, loan maturity extensions, subordinations and fee waivers.
Overview of the Entire Package:
Question and Answers:
A stakeholder asked if individual contractors and solo-preneurs were eligible for the program. CEO Sullivan said that eligible businesses should look to the Small Business Emergency Assistance Grant Programs and other federal packages.
A stakeholder asked if businesses that can stay open are eligible for the NJEDA’s programs. CEO Sullivan said that funding will be targeted to businesses and industries that are the most hardest-hit by the COVID-19 epidemic; and he concluded with stating that each business must display how COVID-19 has impacted their business.
A stakeholder asked how an individual can potentially receive assistance through multiple programs. CEO Sullivan said that the NJEDA’s programs were designed not to conflict with federal programs and that individuals can apply for multiple programs through the authority.
A stakeholder asked how landlords can utilize the NJEDA’s programs. CEO Sullivan said that these programs were designed to assist payroll, debt services and having individuals stay current on their rent; and he concluded with stating that the NJEDA is solely focused on stabilizing the market and to ensure that there are as many resources available to small businesses to “tide through this challenge.”
A stakeholder asked if these programs were open to any businesses. CEO Sullivan said that businesses must have a physical location in New Jersey and does not include home businesses.
A stakeholder asked how a restaurant, which is only open for dinner, can calculate their employees. CEO Sullivan said that applicants should visit cv.business.nj.gov to learn about how the calculations will be handled.
A stakeholder asked how lenders can get involved in the program through the premium lender program. The NJEDA said that lenders should reach out to them to discuss this.
A stakeholder asked if there is specific guidance for seasonal businesses. The NJEDA said that seasonal businesses may struggle to report Q4 salaries, but the agencies first focus is to stabilize businesses that are currently impacted.
A stakeholder asked if someone could apply for the programs without filing their 2019 tax returns. The NJEDA said “yes.”
A stakeholder asked if the Small Business Emergency Assistance Grant Program has a minimum credit threshold. The NJEDA said “no.”
A stakeholder asked where they can receive additional guidance on the programs. The NJEDA said that the cv.business.nj.gov portal will serve as the place for guidance.
A stakeholder asked how long the disbursement of funds will take for the Small Business Emergency Assistance Grant Program. The NJEDA said that applications will be reviewed within 24 to 48 hours after submission; and they said that funds will be paid through direct deposit and will be handled fairly quickly.