SOURCE: NJ COVID-19 Information Hub
The NJ Entrepreneur Support Program is a $5 million program that encourages investment by encouraging private sector investors to provide additional working capital loans to NJ-based entrepreneurial businesses in which the investor is already an equity holder. The program provides a guarantee of an investor loan advanced for working capital to an entrepreneurial company that has been impacted by COVID-19. The investor must have supported the company in the form of a convertible note, SAFE (simple agreement for equity) or equity investment as of March 9th, 2020 (or prior). The funding for the guarantee must have been made after the date of emergency (March 26, 2020, as per the Governor’s Executive Order 103). This program guarantee will be retroactive to that investment date.
Applications are now being accepted. To see whether you might qualify for this program, use the NJ COVID-19 Business Support Eligibility Wizard.
NJEDA will guarantee up to 80% of the total investment amount, not to exceed $200,000 per NJ entrepreneurial company.
In addition to the criteria below, please review the full program specifications approved by the NJEDA Board.
Investor Applicant Requirements
Investor applicant has provided previous funding to the NJ company in the form of a convertible note, SAFE or equity as of March 9th, 2020 or prior
That same Investor applicant is providing/has proved funding after the date of the NJ State of emergency March 26, 2020 which serves as the object of the sought guarantee
The Investor applicant is not a founder/employee of the company
The note for which the guarantee is being sought has at least a one year maturity, with no current payments and no collateral
The Entrepreneurial Business Requirements
Has a minimum of 50% of employees in NJ (as of 12/31/2019)
Has fewer than 25 total employees at the time of application and as of 12/31/2019
Has under $5 million in trailing twelve-month revenues
Has its corporate headquarters in New Jersey (including at least one C suite member with a principal office in New Jersey)
Falls under one of the eight sectors outlined in Governor Murphy’s economic plan (advanced manufacturing, information/technology, life sciences, finance and insurance, clean energy, food and beverage, advanced transportation, food and beverage, film and digital media)
Is registered to do business in NJ and can certify that the company is in good tax standing with the State
Is in good standing with the Department of Labor and Workforce Development
Required Application Documents from the Investor…
Security purchase agreement for the investment prior to 3/9/2020 (Stock Purchase Agreement, Promissory Note, SAFE Note)
Evidence of cash transfer for the Prior Investment. Transfer of Funds from Investor to Company (Cancelled Checks, Wire Transfer, Bank Statement) AND Receipt of Funds by the Company (Bank Statement)
Convertible Note / Promissory Note for the Qualified Current Note Investment/Term Sheet (for which the guarantee is being sought). Please note, the Qualified Current Note must have at least a one-year maturity and must not have any current payments for at least one year and be unsecured. Required at application if the note was executed prior to the application submission date. If note is not executed, a draft of the note or a term sheet is satisfactory; however, an executed note will be required post approval but prior to the execution of the Guarantee agreement
Evidence of cash transfer for the Qualified Investment Note for which the guarantee is sought (from both parties- investor and company as outlined above). Required at application if the note was executed prior to the application submission date. Required post-approval but prior to execution of the guarantee agreement if there is a term sheet at time of application.
Investor Certification (EDA form document)
Required Application Documents from the Entrepreneurial Business…
CEO Certification (EDA form document)
Employment verification documents (such as NJ WR30, W3, Federal 941, PEO letter, etc.) as of 12/31/2019
Income statement for trailing-twelve months. Management prepared income statement is acceptable.
CAP Table signed and dated by CEO as of 3/9/2020
Narrative Description of the Company
Current Tax Clearance certificate. (Please see instructions on next page)
How to Use Premier Business Services to Obtain Certification
If you aren’t registered with Premier Business Services, visit the Premier Business Services portal and select New Users Only – Create an Account and follow instructions. View detailed instructions.
If you are already registered with Premier Business Services, log in. Go to the Tax & Revenue Center. From there, select Business Incentive Tax Clearance. If your account is compliant with its tax obligations and no liabilities exist, the Business Incentive Tax Clearance can be printed directly through the portal.
Questions regarding your account may be directed to 609-292-9292 or via email to Premier Services Registration at Integrated-Registration.Admin@treas.nj.gov.
In case of any challenges with securing a clearance after successfully creating an account and logging in to the Premier Business Services Portal, please contact the Tax Clearance teams support at 609-292-5503 or BusinessAssistanceTC.Taxation@treas.nj.gov.
Updated: April 30, 2020 Source: NJEDA
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