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Review the 1st SHCNJ Virtual Townhall Q&A material below:
Review the 2nd SHCCNJ Virtual Townhall Q&A material below:
Invest Newark Resources
For important federal, state, and local information and resources available to small businesses affected by COVID-19, please visit Invest Newark’s COVID-19 Resource Page at https://investnewark.org/covid-19/. Visit this page frequently for updates.
During the webinar, Invest Newark’s, President & CEO, Bernel Hall, announced that Invest Newark will be launching a business contract portal and a business directory to connect Newark small business community to contract opportunities. Our goal at Invest Newark is to provide you with the resources necessary for your business to thrive. We invite you to register your business on our directory by clicking here. If you need assistance to register, please take a look at our step by step business directory video by clicking here.
For any other concern or question, please reach out to us by sending an email to [email protected]. We will do our best to respond as quickly as we can.
The suite of new initiatives includes:
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 outbreak, 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 outbreak.
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 percent loan guarantees for working capital loans to entrepreneurs.
Small Business Emergency Assistance Guarantee Program – A $10 million program that will provide 50 percent 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. The organizations contracted will be paid based on SBA application submissions supported by the technical assistance they provide.
Additional details on the NJEDA’s new programs, including complete eligibility requirements are available here: https://cv.business.nj.gov. Comprehensive information about New Jersey’s response to the novel coronavirus outbreak is available here: https://covid19.nj.gov/.
U.S. Senate Passes $2 Trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act – $377 Billion Small Business Rescue Plan
• $350 billion in loan forgiveness grants to small businesses to keep their existing workforce and pay for rent, mortgage, utilities, among other expenses. This program will be available for small businesses through their local bankers or lenders, and will be 100% federally guaranteed without collateral requirements.
• $10 billion in emergency grants to provide immediate relief for small business liquidity needs.
• $10 million for the Minority Business Development Agency (MBDA) to provide grants to Hispanic/Minority Chambers of Commerce and Minority Business Centers to provide counseling, training, and education on federal resources and business response to COVID-19.
• $10 billion for MBDA Minority Business Centers for technical assistance for Hispanic and minority-owned businesses.
• Eliminates the Minority Business Center program’s non-federal match requirement for a period of three months and allows for centers to waive fee-for-service requirements through September 2021.
Debt Relief for Existing and New SBA Borrowers
• $17 billion to provide immediate relief to small businesses with standard SBA 7(a), 504, or microloans. SBA will cover all loan payments for existing SBA borrowers, including principal, interest, and fees, for six months. This relief will also be available to new borrowers who take out an SBA loan within six months after the President signs the bill. The measure also encourages banks to provide further relief to small business borrowers by allowing them to extend the duration of existing loans beyond existing limits; and enables small business lenders to assist more new and existing borrowers by providing a temporary extension on certain reporting requirements.
• While SBA borrowers are receiving the six months debt relief, they may apply for a Paycheck Protection Program (PPP) loan that provides capital to keep their employees on the job. The six months of SBA payment relief may not be applied to payments on PPP loans. The stimulus also includes a permanent fix that allows SBA to waive fees for veterans and their spouses in the 7(a) Express Loan Program, regardless of the President’s budget. Under current law, SBA may only waive fees on 7(a) Express loans to veterans when the President’s budget does not project a cost above zero for the overall 7(a) loan program.
Emergency Economic Injury Grants
• $10 billion in funding to provide an advance of $10,000 to small businesses and some nonprofits that apply for an SBA Economic Injury Disaster Loan (EIDL) within three days of applying for the loan. EIDLs are loans of up to $2 million that carry interest rates up to 3.75 percent for companies and up to 2.75 percent for nonprofits, as well as principal and interest deferment for up to 4 years. The loans may be used to pay for expenses that could have been met had the disaster not occurred, including payroll and other operating expenses.
• The EIDL grant does not need to be repaid, even if the grantee is subsequently denied an EIDL, and may be used to provide paid sick leave to employees, maintaining payroll, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments. Eligible grant recipients must have been in operation on January 31, 2020. The grant is available to small businesses, private nonprofits, sole proprietors and independent contractors, tribal businesses, as well as cooperatives and employee-owned businesses.
• A business that receives an EIDL between January 31, 2020 and June 30, 2020 as a result of a COVID-19 disaster declaration is eligible to apply for a Paycheck Protection Program (PPP) loan or the business may refinance their EIDL into a PPP loan. In either case, the emergency EIDL grant award of up to $10,000 would be subtracted from the amount forgiven in the PPP. The bill provides $562 million to ensure that SBA has the resources to provide Economic Injury Disaster Loans (EIDL) to businesses that need financial support.
Resources for Business Counseling Services
• This legislation provides $275 million in grants to the nation’s network of Small Business Development Centers (SBDCs) and Women’s Business Centers (WBCs), as well as the Minority Business Development Agency’s Business Centers (MBDCs), to provide mentorship, guidance and expertise to small businesses. The funding will allow SBDCs, WBCs, and MBDCs to hire staff and provide programming to help small businesses and minority-owned businesses respond to COVID-19.
• The bill also provides funds for the associations that represent SBDCs and WBCs to create a joint platform that consolidates information and resources related to COVID-19 in order to provide consistent, timely information to small businesses. The SCORE mentoring program and Veterans Business Outreach Center program are encouraged to use the platform and participate in the COVID-19 education sessions for their volunteer mentors and small business counselors.
Paid Leave for Government Contractors
• This legislation includes a provision that provides paid leave for employees working on small business contracts with the federal government. The measure allows agencies to modify the terms of a contract to reimburse small business contractors for the cost of providing paid leave, including sick leave, to employees or subcontractors unable to perform work on-site due to a facility closure or for those who do not have the adequate capabilities to perform telework.
Frequently Asked Questions
How do I apply for a small business emergency relief loan?
Contact your bank or lender and ask about applying for a 7(a) small business loan. The CARES act will distribute emergency relief loans through the Small Business Administration 7(a) lending program. The U.S. Treasury will also be issuing new regulations making it easier for almost every FDIC-insured bank to make these loans. If your bank or lender does not offer 7(a) small business loans, there are more options available.
How long will it take to receive economic relief?
In a press conference yesterday, the U.S. Treasury Secretary Steve Mnuchin announced he expects that “by the end of next week, we will have a very simple process where these [loans] can be made and disbursed in the same day.” (White House Transcript)
How much money can I get?
Banks and lenders will use a formula to calculate the loan amount, taking into consideration business payroll and other operational expenses. The maximum amount for a loan has been temporarily raised from $5 million to $10 million. The loans are expected to cover eight weeks of employee salaries and other operational expenses.
Will I have to pay the loan back?
The bill as it currently stands provides for loan forgiveness to businesses that keep and continue paying their employees.
When will the economic relief bill become law?
The CARES Act was approved by the U.S. Senate last night and is scheduled for a vote in the U.S. House of Representatives on Friday. The President is expected to sign the bill into law immediately after.