To Our Valued Clients & Friends:
We hope you and your families are well and safe.
We are facing unprecedented times affecting our way of life, our families, our communities and our businesses. First and foremost, the E&K Family extends its heartfelt wishes to all who are ill for a quick and full recovery.
In order to help ease your passage through this difficult time, E&K would like to share with you a synopsis of the Federal and State resources and relief programs that may be available to help you, your family and your business.*
More details can be found here:
For You and Your Family:
Federal Stimulus Plan
Some of the most significant provisions affecting individuals:
- Single Americans will receive $1,200, married couples will get $2,400 and parents will receive $500 for each child.
- Unemployed individuals, including freelancers and furloughed employees, will get an extra $600 per week for up to four months, on top of state unemployment benefits.
- The package also calls for a new pandemic unemployment assistance program, which will provide jobless benefits to those who are unemployed, partially unemployed or unable to work because of COVID-19 and don't qualify for traditional benefits.
- Note that many individuals who typically do not qualify for unemployment insurance will qualify under the package, including independent contractors and self-employed individuals. In sum, those who are unemployed, partially unemployed or who cannot work for a wide variety of coronavirus-related reasons will be more likely to receive benefits.
- The Department of Education will suspend payments for student loan borrowers without penalty through September 30.
- There will be housing protections against foreclosures on mortgages and evictions for renters. Anyone facing a financial hardship from the coronavirus will receive a forbearance on federally backed mortgage loans of up to 60 days. Those with federally backed mortgage loans who have tenants are not allowed to evict tenants solely for failure to pay rent for a 120-day period.
State of New Jersey Actions
Governor Phil Murphy announced last week that the state is initiating a 90-day mortgage grace period for families impacted by the COVID-19 crisis. National mortgage lenders such as Citigroup, JP Morgan Chase, US Bank, Wells Fargo, and Bank of America, as well as many other lenders and mortgage providers have agreed to partner with New Jersey on this initiative. In addition, those institutions will:
- Provide borrowers with a streamlined process to request a forbearance for COVID-19-related reasons, supported with available documentation;
- Confirm approval of and terms of forbearance program; and
- Provide borrowers with the opportunity to request additional relief, as practicable, upon continued showing of hardship due to COVID-19.
- For at least 90 days, financial institutions will also waive or refund at least the following for customers who have requested assistance:
(a) Mortgage-related late fees; and
(b) Other fees, including early CD withdrawals (subject to applicable federal regulations).
For Your Business:
Federal Stimulus Plan: Paycheck Protection Program
Last Friday, the President signed the CARES Act, the $2 trillion stimulus package Congress passed to mitigate the economic impact of the COVID-19 pandemic. In addition to providing checks to most taxpayers, the CARES Act expands the availability of small business loans under Section 7(a) of the Small Business Act. This new Paycheck Protection Program permits loans to be used for payroll costs, mortgage interest, rent, utilities, and interest on certain other debt. Up to 100% of these loans may, subject to certain restrictions, be forgiven.
II. Frequently Asked Questions:
Who is Eligible?
A: Generally, any business (including 501(c)(3)s) with fewer than 500 employees is eligible for a loan under the Paycheck Protection Program.
What is the Maximum Amount That Can be Borrowed?
A: The lesser of (A) $10 million or (B) 2.5 times the average total monthly payroll costs of the business concern.
Are Borrowers Required to Provide Collateral or a Personal Guarantee?
A: No. Collateral and personal guarantee requirements are waived for Paycheck Protection Program loans.
What is the Interest Rate?
A: The interest rate cannot exceed 4%.
How Much is Eligible for Forgiveness?
A: Up to 100% of the Paycheck Protection Program loans may be eligible for forgiveness; however, decreases in employee headcount or wages may reduce the amount eligible for forgiveness.
III. Additional Resources:
Additional information can be found at:
- 7(a) Loan Application Checklist
- SBA Lender Match
Federal Stimulus Plan: Economic Injury Disaster Loan
Loans available to small businesses through the SBA for working capital for payroll, accounts payable and other bills that could have been paid had the pandemic disaster not occurred. Applicants must demonstrate working capital losses due to the present pandemic. Apply
State of New Jersey Actions
The New Jersey Economic Development Authority Board has authorized the creation of seven programs to help provide eligible small- and mid-sized businesses with financial assistance in response to the challenges the COVID-19 pandemic has caused. The best way for businesses to determine their eligibility for these programs is through the
NJEDA Emergency Assistance Wizard
Summary of NJEDA relief programs:
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 10-year terms with 0% for the first five years, then resetting to the EDA’s prevailing floor rate (capped at 3%) for the remaining five years.
Community Development Finance Institution 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 microbusinesses. 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% loan guarantees for working capital loans to entrepreneurs.
Small Business Emergency Assistance Guarantee Program:
A $10 million program that will provide 50% 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. SBA. The organizations contracted will be paid based on SBA application submissions supported by the technical assistance they provide.
While many things are rapidly changing, our commitment to you and our community remains constant. We are here, ready to support all of your insurance needs as we work through this challenge together.
* This is by no means intended to be an exhaustive list and description of available programs, nor should this be construed as tax or legal advise. Consult your accounting and legal professionals for appropriate advise on utilizing all government relief programs and other assistance with respect to your specific issue(s).