Luis De La Hoz, the chairman of the Statewide Hispanic Chamber of Commerce of New Jersey, said it was almost too good to be true. Millions of dollars … set aside for underserved communities … just incredible, he said.
“This is what we have been waiting for,” he said. “So many Main Street shop owners in our community haven’t been able to get access to capital. This will help so much.”
De La Hoz was talking about the New Jersey Economic Development Authority’s decision last week to reserve $15 million of its Small Business Emergency Assistance Grant Program for businesses located in Opportunity Zone areas.
The set-aside was part of an overall announcement that saw the EDA add $50 million for a second phase in the program. Most small business with 25 or fewer employees likely will be eligible — as will some nonprofits.
Tim Sullivan, the CEO of the EDA, said making the expanded program more inclusive was a key. As was making sure that expansion included communities that often are left out.
“This much-needed federal assistance will allow us to support thousands of additional businesses that were not eligible for the first round of grants, with a particular focus on firms in the most at-risk communities,” he said.
The first version of the program, introduced and carried out in late March and early April, had just $5 million available for a small number of specific businesses.
De La Hoz said many in his group missed out.
“More than 60% of our businesses have not been able to gain access to grants,” he said.
They should be able to now.
Sullivan said the second phase of the Emergency Assistance Grant Program is much broader in both its funds — and those eligible to receive them.
The changes to increase eligibility for phase two include:
- Increasing the cap on the number of full-time employees: Companies with up to 25 employees may apply; the limit was 10 in the first phase;
- Elimination of North American Industry Classification System code restrictions: This will make nearly all small businesses eligible;
- Increased eligibility of nonprofits: Elimination of NAICS codes makes 501(c)(3), 501(c)(4) and 501(c)(7) nonprofit organizations eligible;
- Inclusion of home-based businesses and sole proprietors: They were not eligible in the first phase.
The EDA did not announce the date it will begin accepting applications — details are still being worked out.
The EDA did say that $5 million of the program will be reserved for companies that were told they were on a “waiting list” from the first phase. Those told they were on the “oversubscribed” list will need to reapply.
Grants of up to $10,000 will be awarded; it is not clear how the size of the grant will be determined. There will be no application fee. And applications will be reviewed on a first-come, first-served basis.
In order to qualify, the small business or nonprofit must certify the following:
- It was in operation on Feb. 15;
- It has been negatively impacted by the COVID-19 outbreak;
- It will make a best effort not to furlough or lay off any employees.
All applicants also will need to file an affidavit identifying all previous COVID-19-related funding it has received, including Paycheck Protection Program grants from the federal government and all loans and grants from the Small Business Administration.
Funding for the expansion of the program, which was announced last week, comes from money the state received from the federal Coronavirus Aid, Relief and Economic Security, or CARES, Act.
Sullivan said the program affirms the state’s commitment to the small business community.
“The NJEDA has worked tirelessly to support business owners and their employees, but it quickly became clear that the scope of the challenges this virus presents went far beyond what we could address with our resources alone,” he said.
The decision to specifically include businesses in designated Opportunity Zone areas also was saluted by John Harmon, the CEO of the African American Chamber of Commerce of New Jersey.
“This is what we’ve been waiting to hear,” he told ROI-NJ. “This is phenomenal; this is going to impact lives.
“When the governor talked about stronger and fairer — this speaks unequivocally to the fairer side.”
The Opportunity Zone program provides tax incentives for individuals who reinvest unrealized capital gains into high-impact, long-term projects in high-poverty communities across the country.
U.S. Sen. Cory Booker (D-N.J.), one of the co-sponsors of the bill, was glad to see a provision for Opportunity Zone businesses was included in the program.
“It is becoming increasingly clear that, while the coronavirus pandemic is creating tremendous challenges for everyone, it is having a particularly tragic impact on our most at-risk communities,” Booker said. “The NJEDA’s Small Business Emergency Assistance Grant Program has been a vital resource for business owners going through extreme hardship, and I am glad to see the authority making equity a centerpiece of the program’s second phase.
“Setting aside resources for businesses in high-poverty communities will help ensure support goes to those who need it, while protecting the most vulnerable New Jerseyans and setting us up for a faster and fairer recovery.”
Read more from ROI-NJ on coronavirus:
- EDA’s $50M small business grant program will set aside $15M for firms in Opportunity Zones
- Read all ROI-NJ’s coverage of coronavirus in New Jersey