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Corporate Alert >> New York City to Provide Financial Assistance to Small Businesses Impacted by COVID-19

March 20, 2020

New York City (NYC) has recently made available two financial assistance programs to aid small businesses located in the five boroughs. NYC Mayor Bill de Blasio announced on March 8, 2020 that NYC will offer access to the NYC Employee Retention Grant Program (ERGP) and the NYC Small Business Continuity Fund (SBCF) to provide financial relief to small businesses located in NYC who have experienced revenue reduction due to COVID-19.

NYC Employee Retention Grant Program

The ERGP provides grants to NYC small businesses with fewer than five employees to cover 40% of payroll costs for a two-month period in amounts of up to $27,000.

Eligibility Requirements
To qualify for the ERGP, businesses must:

  1. Be located within the five boroughs of NYC;
  2. Demonstrate that COVID-19 caused at least a 25% decrease in revenue;
  3. Employ one to four employees in total across all business locations;
  4. Have been in operation for at least six months; and
  5. Have no outstanding tax liens or legal judgments.

NYC Small Business Continuity Fund

The SBCF provides zero interest loans of up to $75,000 to help NYC businesses with fewer than 100 employees alleviate the financial distress caused by profit reductions resultant from COVID-19.

Eligibility Requirements
To qualify for loans under the SBCF, businesses must:

  1. Be located within the five boroughs of NYC;
  2. Demonstrate that COVID-19 caused at least a 25% decrease in revenue;
  3. Employ 99 or fewer employees in total across all business locations;
  4. Demonstrate ability to repay the loan; and
  5. Have no outstanding tax liens or legal judgments.

ERGP and SBCF Applications

Eligible businesses can apply for an ERGP here. Although applications have not yet opened for the SBCF, interested businesses can complete this interest form to receive a notification when applications become available.

As part of the application process, applicants will be required to verify at least a 25% decrease in revenue. The NYC Department of Small Business Services will compare the business’ average revenue for two months in 2020 following the COVID-19 outbreak to both:

  1. Average revenue for the same two month period in 2019 and
  2. Average monthly revenue based on total 2019 revenue.

To verify the 25% decrease, applicants will be required to upload:

  1. Financial documents (in the form of point-of-sales reports, bank statements, quarterly sales tax filings, 2019 tax returns or CPA profit & loss statements) that cover:
      1. Two months in 2020;
      2. The same two months in 2019; and
      3. The full 2019 calendar year.
  2. Payroll records for the most recent two months;
  3. A signed participation affidavit; and
  4. Bank account information.

It is recommended that applicants gather these documents in preparation of submitting an application.

The Bottom Line

To provide financial relief to small businesses in NYC that have experienced a loss of revenue due to the impact of COVID-19, NYC Mayor Bill de Blasio made available the:

  • NYC Employee Retention Grant Program; and
  • NYC Small Business Continuity Fund.

Small businesses should review the qualifying requirements and begin gathering the necessary documents to submit an application for financial relief.

Author(s)

JUSTIN R. POLLAK
Partner
212.468.4889
jpollak@dglaw.com
Corporate

LARA E. COHEN
Associate
212.468.4983
lcohen@dglaw.com
Corporate