South Jersey BIZ - Issue #1 (January 2021)

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Biz 0121_PPP Small Business Loans_Dept - FINAL_Dept 1 / 22 / 21 12 : 50 PM Page 2 Palumbo , regional director of the Small cording to Nick DellaRova , director of con - businesses can do [ to plan for the future ] Business Development Center ( SBDC ) at sulting with CLM Advisors . is to come up with a cash flow manage - Rutgers - Camden . “ The biggest hurdle “ The Small Business Administration’s ment plan , ” says Peritz . “ There are a lot they have is understanding what is avail - Economic Injury Disaster Loan program of other vehicles outside of the PPP and a able to them and their eligibility and where has been very useful to many businesses , number of other provisions that could as - to go . ” and was just recently extended for another sist businesses through this time and help The SBDC covers Burlington , Camden , year , ” he says . “ Also , the Consolidated them get through any cash flow issues . ” Gloucester and Salem counties and regu - Appropriations Act just passed through With the need to give businesses the larly works with clients to secure various Congress opens up the possibility of using tools to succeed in mind , the New Jersey evelopment Authority levels of funding . Since the pandemic be - employer retention credits either instead Economic D ( NJEDA ) has also ramped up its efforts . gan that outreach has been on overdrive of or along with a second - draw PPP loan , Since last March , the organization has sup - as concerned business owners turn to the for those businesses that qualify . ” ported nearly 55,000 businesses with a va - center for guidance . And almost a year riety of resources and has specifically tar - later , the calls are still coming in in droves . geted micro businesses , minority - and “ Since [ the federal government ] an - women - owned companies , and busi - nounced the new round of PPP [ in early nesses in communities that are eligible to January ] , we have about 10 clients a day be designated as Opportunity Zones . The calling us and saying that they need help , ” combination of grants , low - interest loans , says Palumbo . Looking ahead , one of the financing guarantees and free business According to Robert Schumin , tax sen - [ NJEDA’s ] top priorities is consulting has totaled more than $ 240 mil - ior manager at Friedman LLP , the fluid na - helping businesses mod - ture of the situation has only added to the lion in economic relief . ernize and become more uncertainty . “ Looking ahead , one of the Authority’s “ Business owners are scared and wor - top priorities is helping businesses mod - resilient so they are pre - ried about putting food on the table , so ernize and become more resilient so they pared to adapt to future they are anxious whenever news comes are prepared to adapt to future unex - unexpected challenges . ” out , ” he says . “ The hardest part is staying pected challenges . In the immediate fu - — NJEDA CEO Tim Sullivan on top of that and making sure that we ture , that means working with partners in are up to date on the new tax rules and government and community leaders to benefits , for small businesses especially . ” DellaRova says many of CLM’s clients provide businesses with the resources and One of the more recent changes was have also taken advantage of local offer - information they need to stay open safely , ” news that expenses paid for with forgiv - ings through their respective counties or says NJEDA CEO Tim Sullivan . “ Looking planning to able PPP loans will be tax deductible , mak - public / private loan programs . “ It’s difficult farther out , the Authority is provide technical assistance and free busi - ing them even more attractive to cash - to stay on top of all of them , but every ness consulting programs to help business strapped business owners . Previously , the business owner should research opportu - local chambers , trade owners develop the tools and skills they IRS had been steadfast that wouldn’t be nities through their groups and government offices . ” need to recover and face future challenges the case , but Congress overruled that po - Because of the sheer volume of loans with confidence . It is impossible to predict sition in late December when it signed the being handled , banks aren’t necessarily the future , but the NJEDA is committed Consolidated Appropriations Act . looking to hold one’s hand to help walk to helping businesses prepare so they are “ [ The decision ] was a very good thing Do - them through the process . Sean Balliet , a in the best position to succeed regardless for businesses , ” says Tiffany Wagner nio , a partner with Archer who specializes CPA and certified financial planner with of what the future holds . ” in tax law and business counseling . “ We Baratz & Associates , says that’s where hav - And now that Gov . Phil Murphy has already knew from the CARES Act that for - ing a skilled advocate on your side can signed the New Jersey Economic Recov - given PPP loan proceeds would not con - make all the difference . ery Act of 2020 into law , the NJEDA will stitute taxable income to the PPP bor - “ While the professional fees of a CPA be tasked with helping implement the six - rower — which is an exception to the may be the last expense a small or mid - year , $ 14 billion package of economic in - general rule that canceled or forgiven debt size business owner wants to spend when centives . The suite of programs is de - is taxable . As a result , the IRS ruled that times are tight , a CPA can help guide and signed to create jobs , bolster Main Street expenses paid with forgiven PPP loan pro - support your business to make sure you businesses , revitalize abandoned and con - ceeds would not be deductible . The Con - receive every possible opportunity for gov - taminated properties , bring healthy gro - solidated Appropriations Act , however , ernment - sponsored money , loans and tax cery stores to food deserts and boost the overrode this position by providing that credits available . … I have seen many busi - state’s innovation ecosystem , according Sullivan . The implementation will be a expenses paid with forgiven PPP loan pro - nesses miss the opportunity for this assis - to months - long challenge and one that re - ceeds are deductible , which created a tance because they did not consult their quires a fully collaborative effort . rofessionals , ” says Balliet . double tax benefit for businesses . ” p “ The NJEDA , in consultation with the David Peritz , senior manager with Her - But while the two rounds of PPP have Office of the Attorney General , will de - bein and Company , says his firm has been garnered the most attention , it’s not the velop program rules and regulations that consulting with several banks while also only COVID - 19 related funding available . may be best will facilitate consistent and compliant im - working to better educate its clients . Trying to determine what suited for individual needs is vitally impor - plementation of the incentives and other “ It was nearly impossible to plan for tant given “ the main fiscal lifelines are economic tools contained in the act , ” says an event like a pandemic , but now that broad - based government programs , ” ac - Sullivan . “ This process will involve working we are months into this , the best thing SouthJerseyBiz.net | VOLUME 11 ISSUE 1 | SOUTH JERSEY BIZ | 15

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Biz 0121_PPP Small Business Loans_Dept - FINAL_Dept 1 / 22 / 21 12 : 50 PM Page 3 F I N A N C E able to receive , process and approve loan demic has taught people to be a little more requests in less than 14 business days , ” conservative in their spending , ” he with other state agencies and depart - says CEO Marie Mascherin . says . “ Long - term capital improvements ments to codify comprehensive , sound Additionally , NJCC has remained com - should still occur , but I think owners will be processes for application , approval , certi - mitted to supporting nonprofits during a little more cautious and forward - looking fication , reporting and compliance for this crisis . In the first several years of oper - before pulling the trigger on large items . current lending each of the programs . ” ation , the company only financed non - “ And as a result of the and grant assistance , banks may make it New Jersey Community Capital profits , so Mascherin recognizes the vital tougher to get loans in the future with ( NJCC ) was one of three community de - role they play and NJCC has helped sev - possible restrictions and tighter covenant velopment financial institutions ( CDFI ) cho - eral secure PPP loans . requirements . While no one can predict sen to partner with the NJEDA to help “ Nonprofits provide essential services the future , business owners may investi - leverage between $ 20 and $ 30 million in to community and residents . Their work gate obtaining a business interruption in - low - cost financing to help struggling small has never been more important than dur - surance policy in case there is another un - businesses and nonprofits . As a result , ing the shutdown as they provide access predictable occurrence . ” NJCC established the Garden State Relief to critical services . Without these organi - With vaccines being rolled out there is Fund , a small business loan program for zations , many communities and residents been able to survive during hope on the horizon which is inspiring con - businesses with three to 50 full - time em - may not have the shutdown , ” she says . fidence . But Schumin says while the nar - ployees . To date , NJCC has raised more While the pandemic wasn’t something rative may change to being on the up - than $ 16 million to fund the loans , a por - anyone could have foreseen , the many swing , it will take some time for many tion of which will be guaranteed by the months since last March’s shutdown have businesses to fully recover from the dam - NJEDA . provided valuable lessons as businesses age done . “ Demand for our Garden State Relief “ The best - case scenario is six - to - seven have learned to pivot and adapt to better loan program does remain strong and we months , but it’ll probably be a full year be - to supporting small manage the crisis . Balliet says he hopes are looking to shift fore things reach some semblance of what businesses in the recovery / re - opening that one of those takeaways is the need normal will be , ” he says . “ There won’t be phase . Anticipating strong demand , we to keep a larger “ rainy day ” fund . as much uncertainty [ in 2021 ] as in 2020 , did establish a dedicated team within “ Most business owners take home and but it’s likely not going to be until 2022 be - NJCC to triage and handle applications . spend all of what they make — that’s the ? fore we kind of turn it around all the way . ” That team has done a great job [ and is ] nature of our economy . I think this pan - 16 | SOUTH JERSEY BIZ | VOLUME 11 ISSUE 1 | SouthJerseyBiz.net

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