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NJEDA Entrepreneur Guarantee Prog. for Startup Investors/ Entrepreneurs opens Tomorrow-4/22/20 @ 9am

SOURCE: Business.NJ.gov


The NJ Entrepreneurship Guarantee 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 will be accepted beginning Wednesday, April 22, 2020, at 9:00 a.m. 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.


The eligibility requirements for the startup and the investor are as follows:


The entrepreneurial business must:

  • Have a minimum of 50% of employees in NJ

  • Have less than 25 total employees at the time of application 

  • Have under $5 million in revenues

  • Have corporate headquarters in New Jersey (including at least one C suite member with a principal office in New Jersey)

  • Fall 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)

  • Be registered to do business in NJ and must certify that the company is in good tax standing with the State

  • Be in good standing with the Department of Labor and Workforce Development


Eligibility:

  • Investors can include, but are not limited to, individuals, trusts, and corporations  

  • Investors must already have equity interest and equity position in the company 

  • Qualified investors are not required to be New Jersey residents


Applications will be accepted in the coming weeks. Completed applications will be considered on a first come, first serve rolling basis.


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 gurantee 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. 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 21, 2020

Source: NJEDA


READ MORE:

https://faq.business.nj.gov/en/articles/3835239-what-assistance-is-available-for-startup-investors-or-entrepreneurs-via-the-njeda-entrepreneur-guarantee-program-applications-open-wednesday-april-22-at-9-00-a-m

Funded in part through a Cooperative Agreement with the U.S. Small Business Administration, The New Jersey Small Business Development Centers (NJSBDC) network is also funded by the State of New Jersey and is hosted by Rutgers Business School: Network and New Brunswick.

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