Financial Assistance to Help Small Businesses Affected by COVID-19
** Update – June 2, 2020: The New Jersey Economic Development Authority (NJEDA) today announced that their expanded Small Business Emergency Assistance Grant Program would begin accepting applications on Tuesday, June 9, 2020, at 9:00 am. **
The COVID-19 crisis continues to transform the business landscape. The convergence of forced business closures and dwindling demand for services has forced many to make difficult business decisions. For some, this has resulted in the need to layoff or furlough employees while others are carefully analyzing operating expenses. Although the impact is different for each business, it’s clear the effect has been significant, as evidenced by the number of companies seeking new sources of working capital. Some are relying on expanded lines of credit, while others are evaluating the various loan programs intended to bolster cash flow and retain employees.
In addition to assistance via the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act, several state and local specific loan programs are designed to provide a rapid cash infusion. Since there is an overwhelming amount of information available, many in New Jersey and Pennsylvania are wondering which programs make the most sense. To help clients, prospects, and others, Klatzkin has provided a summary of two recently released state/local programs.
Bucks County, Pennsylvania
Small businesses in Bucks County who are struggling in the wake of COVID-19 have a chance to find relief via the Bucks Back to Work Small Business Grant program, a $6M fund from the federal government. For qualified Bucks-area businesses that apply and receive approval, grants of up to $25,000 – or 25% of a business’s annual operating expenses – will be awarded. Please note that nonprofits, franchises, and passive businesses such as landlords are not eligible.
The grant money is not a loan and does not require repayment. Eligible businesses include those with 49 or fewer employees with revenue of less than $700,000. Application acceptance is for one-day-only, Tuesday, May 26, 2020, between 5:00 a.m. and 9:00 p.m. EST. Since the program fund is limited to $6M, qualifying companies should be prepared to submit their application as early as possible.
New Jersey
The New Jersey Economic Development Authority (NJEDA) announced on May 22, 2020, a $50M expansion of its Small Business Emergency Grant Program, to help qualified New Jersey-based businesses and nonprofits adversely impacted by the COVID-19 emergency. The expanded program will provide grants up to $10,000 to eligible companies and relaxes eligibility criteria to include a wider variety of businesses as well as home-based businesses, sole proprietorships, and nonprofits.
According to NJEDA CEO Tim Sullivan, the application period will likely open on June 8, 2020. Businesses and nonprofit organizations are encouraged to consult the Emergency Assistance Eligibility Wizard now to determine prequalification.
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These state/local programs can be combined with current SBA offerings such as the Payroll Protection Program and Economic Injury Disaster Loans. The combination can provide much-needed relief for impacted companies. If you have questions about the information outlined above or need assistance with another COVID-19-related tax or accounting issue. Klatzkin can help. For additional information, click here to contact us.
The above represents our best understanding and interpretation of the material covered as of the date of this post. Things are moving at a rapid pace, and as such, information is subject to change. This information is provided for informational purposes only and is not intended to be a substitute for obtaining accounting, tax, or financial advice from an accountant.