Does Your NJ Small Businesses Need Help With Lease Payments? New Program May Help

Does Your NJ Small Businesses Need Help With Lease Payments? New Program May Help

New Jersey continues to roll out new programs aimed to help small businesses impacted by COVID-19. The latest, known as the Small Business Lease – Emergency Assistance Grant Program (SBL-EAGP) will allow eligible businesses to apply for grants of up to $10,000 for lease costs. The $6 million grant program will be funded via the CARES Act and administered by the New Jersey Redevelopment Authority (NJRA). 

“We are committed to helping small businesses across our state survive this unprecedented crisis,” Governor Phil Murphy said in a press statement. “A stronger and fairer New Jersey starts from the bottom up. The Small Business Lease – Emergency Assistance Grant Program will infuse much needed funding into local economies by assisting both small businesses and the landlords that they rent from.” 

Eligibility for Small Business Lease – Emergency Assistance Grant Program

To participate in the SBL-EAGP, businesses must be located in one of 64 eligible municipalities. They must also be commercial tenants currently leasing commercial space in mixed-use buildings, tenants leasing space in commercial buildings, and storefront businesses. Non-profits entities with the following designations will also be permitted to receive grant funding: 501(c)(3), 501(c)(4), and 501(c)(7).

To be eligible as a small business, the applicant’s leased premises must be less than 5,000 square feet of leasable space. Multiple locations leased by the same business must be aggregated. The program aims to assist businesses in need of assistance with monthly lease payments due to COVID 19; applicants do not have to be delinquent on their lease payment(s) to apply for this program. The NJRA will also assist applicants, delinquent as of March 1, 2020.

While most businesses will be eligible, the following are excluded: gambling and gaming activities, the conduct or purveyance of “adult” (i.e., pornographic, lewd, prurient, obscene or otherwise similarly disreputable) activities, services, products or materials (including nude, or semi-nude performances or the sale of sexual aids or devices); any auction or bankruptcy or fire or “lost-our-lease” or “going-out-of-business” or similar sales; sales by transient merchants, Christmas tree sales or other outdoor storage; any activity constituting a nuisance; or any illegal purposes. Tattoo shops, vaping and marijuana dispensaries and any business involved in selling alcohol are also ineligible.

How to Apply for a Small Business Lease – Emergency Assistance Grant

Applicants must provide the following to be considered for the program:

• Current copy of executed lease outlining terms and conditions of said agreement
• Certification from tenant applicant confirming closure date of operations due to COVID-19
• Copy of current New Jersey tax clearance certificate
• Applicant must answer debarment questions included in the Application
• Verification from the landlord that the respective business is in good standing with monthly lease obligations prior to March 1, 2020
• Certification signed by landlord and tenant acknowledging amount of outstanding lease obligations, not to exceed $10,000 (tenant will not be disqualified if monthly lease payments are current/up to date)

Under the terms of the grant agreement, both the tenant and landlord are required to sign a commitment that once NJRA releases funds and “payment” is received for the lease obligations, the landlord must certify the tenant will not be displaced during this period of recovery (that is, for the time period for which the grant paid the lease obligations). Additionally, the landlord must agree not to seek any remedies against the tenant for not paying the lease obligations that were paid by the grant. In the event the landlord displaces tenant after receipt of the lease payment, the Landlord will be responsible for reimbursing the NJRA for the total amount of the grant awarded.

Next Steps for New Jersey Businesses

The application portal opened August 10, 2020 at 9:00 am. Applications will be handled on a first-come, first-served basis. According to the NJRA, “the volume of applications anticipated during this period is expected to reach numbers that may result in additional review of applications to determine eligibility.” Accordingly, time is of the essence for small businesses seeking to apply for a grant.

If you have questions, please contact us

If you have any questions or if you would like to discuss the matter further, please contact me, Ashley Brinn, or the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.