April 28, 2020
NJGCA April 28th
Coronavirus Shutdown Update
Reminder: New Funding Available and Helpful Loan Information
Again, a reminder of what we sent out in the Wildfire Alert the other day regarding new funding available for federal loans. The funds will go quickly. Get in line. If you have been unable to get a bank or lender to accept your application for PPP funding, you can try reaching out to Scott Seidman at Heartland Payroll, or, we have been advised by our contacts in the NJ Banker’s Association to recommend Connect One Bank: https://www.connectonebank.com/
Our friends at NFIB sent THIS document to us outlining the differences between the federal loans available. Take a look at this document if any of you are still experiencing confusion between the EIDL and PPP loans. Unfortunately, the SBA is not accepting new applications for the EIDL program at this time even though they have been given more funding. They are currently working through their backlog and using the new money for those that have already applied. It is not known when they may begin accepting new applications.
Update on Loan Availability
We have continued to hear from banking professionals concerning PPP and EIDL applications, as well as members who continue to be frustrated as they seek relief from each program. As you know, the enactment of “Phase 3.5” on Friday allocated fresh funds into both programs. However, many industry watchers and professionals remain concerned that even with this most recent cash infusion, the funds will become quickly depleted. What’s more, as the previous round of application submissions were oversubscribed, there is also additional anxiety that Friday’s allocation of funding will be used to pay the backlog of applications -- with only a small number of new applicants ultimately getting relief from the newest infusion.
In this current climate, such uneasiness is warranted. After consulting with colleagues in the banking industry, we continue to strongly believe that members must engage in “self-help” and act aggressively in submitting their PPP applications (if they haven’t already done so). If recent history has demonstrated anything, it is that the media, business groups, and public outcry have been effective in fueling awareness and triggered the “Phase 3.5” proposal for additional funding. If the business landscape continues to suffer while the crisis advances, there is the very real possibility that more funding will become available. And just as previous submissions will likely be considered before new applications, it is imperative that you act now to “hold your place” when/if more funds become available.
Governor Murphy Outlines Reopening Strategy
Yesterday the Governor gave an outline for what his Administration will be looking at as it starts to remove restrictions and allow for a gradual reopening of society. Unfortunately, no dates or even estimates of dates were given, other than it would be a matter of “weeks, not months”. One point he made was that the state needs to double its testing capacity before any meaningful action should happen, but that it would take as long as a month for capacity to be doubled. He will be creating an advisory economic committee to help determine how the economy can be reopened and what requirements will be in place. It is likely that requirements for masks, six feet of social distancing, and reduced capacity allowed inside a business will be with us for a very long time to come, perhaps until a vaccine is widely available.
Make Your Member of Congress Work for YOU
NJGCA has been assisting members with a wide variety of concerns throughout this crisis. If you are having an issue, particularly with some form of government program, try reaching out to your member of Congress. Many of you have already used the NJGCA Voter Voice system to do that previously, and many have already received replies and assistance. Members of Congress have staffers dedicated to helping their constituents and may have the access and connections to assist in getting through to certain government officials. To find out your representatives and send them a message, you can use this NJGCA Action Center link: http://www.njgca.org/legislative-action-center/
***scroll to the bottom and enter your zip code under ‘Find Politicians.’
Relief Eligibility Wizard
As you all should be aware, the New Jersey Economic Development Authority rolled out the specifics for how businesses hurt by the COVID-19 pandemic can apply for a $10 million state loan program, after a similarly-natured grant program was depleted just an hour after applications opened on April 3. The state posted an online "eligibility wizard" for business owners to gauge which state assistance programs could help them the most. If you have not done so yet, you can try that out HERE.
It has recently come to our attention that the attorney general has sent out about 700 letters this week to businesses suspected of price gouging necessary products during the pandemic. Often consumers make complaints because everyone is a bit emotional right now, 99% of the complaints have no basis and will be successfully defended. However, you need to do your own self-evaluation to see if you are complying with the laws. In a situation like this you need to use your best judgment. Some examples of complaints that were filed from our industry recently include:
- a convenience store allegedly charging $6 for a single roll of paper towels;
- a convenience store allegedly raising the price of 2-ounce bottles of hand sanitizer to $4.99 from its $1 pre-emergency declaration price—an increase of almost 500%;
- a convenience store allegedly charging $60 for a small package of toilet paper;
- a gas station allegedly selling single-use masks for $25 each;
One unanswered question with regard to the current price gouging law is: What if I am selling a product today that I was not selling when the State of Emergency was declared? What is the baseline price that will determine if I am charging too much? The current statute is silent on this subject. Not only have we asked this question, but no one seems to have an answer. One legal expert who attended a web meeting with NJGCA staff focused solely on NJ’s Gouging law, simply declared that he didn’t know the answer, and believes that in a situation such as that, should charges ever be filed, the judge hearing the case will make the determination, thereby making new law. This is where your own judgement and self-evaluation are required.
I wanted to remind you all that price gouging laws are in effect during a state of emergency. The prohibition starts with the declaration of the State of Emergency and lasts for 30 days, though it can be extended by the Governor. There's a statute in place and we are obligated to follow it.
Keep in mind that if you are caught, you will be subject to hefty financial penalties.
I have summarized the statute for you below:
The State of Emergency declaration triggers the price gouging law (N.J.S.A. 56:8-109).
Specifically, this law makes it an unlawful practice to sell merchandise at what constitutes an excessive price increase for 30 days after the declaration of the State of Emergency. An excessive price increase is defined as:
"Excessive price increase" means a price that is excessive as compared to the price at which the consumer good or service was sold or offered for sale by the seller in the usual course of business immediately prior to the state of emergency. A price shall be deemed excessive if:
(1) The price exceeds by more than 10% the price at which the good or service was sold or offered for sale by the seller in the usual course of business immediately prior to the state of emergency, unless the price charged by the seller is attributable to additional costs imposed by the seller's supplier or other costs of providing the good or service during the state of emergency;
(2) In those situations where the increase in price is attributable to additional costs imposed by the seller's supplier or additional costs of providing the good or service during the state of emergency, the price represents an increase of more than 10% in the amount of markup from cost, compared to the markup customarily applied by the seller in the usual course of business immediately prior to the state of emergency.
A violation of the law is punishable by a fine of up to $10,000 for the first offense and $20,000 for the second and subsequent offenses. Each individual sale of merchandise is considered a separate and distinct event.
The Governor and the Attorney General have already made it clear that they are on the lookout for any instance of price gouging on any item, especially bottled water, toilet paper, and hand sanitizer. They are clearly looking to hit someone with a fine, don't let it be you!
If you have any questions, concerns or comments, please reach out to Sal at email@example.com
Thank You to Our Members AND Thank You from Our Members:
Thank you to those of you that have reached out with updates for us. The NJGCA team has been working hard to bring you accurate information as timely as possible. We received these two emails in the last few days that lifted our spirits:
I faithfully look for your companies email to guide us thru good and now bad times. There are 7 of us here. Proud to say one tech/manager has been with us since day one. We are lucky enough that our son who literally was born into the business is by our side each day. I took the information you sent and applied for 3 loans I thought we would fit into. NJEDA, SBA EIDL and the PPP. All 3 loans/grants have been transferred into our bank account. The last one was the EIDL this morning. We did have to furlough one of our young techs, but are hoping to bring him back soon. Business is off about 60 %. But, we show up each and every day to be here for our customers should they need us. A BIG thank you for keeping me in the loop with all the information and direction for applying for the loans. I did all my homework getting as much information together before submitting per you. When I say you it goes without saying the whole team. The morning the NJEDA opened I had 2 computers in the office and refreshing them both at the same time, as per you guys. I thought I was back in the 80's trying to get thru to Ticketmaster. You may be too young to remember that. I was lucky to log into their website at 8:58 am with a confirmation at 9:03. The EIDL was easy as well. On the other hand, the PPP was not !! It was dumb luck that my payroll accountant happened to be working on the Saturday that my bank, PNC opened up their applications. I had what I was told I would need, but then found out I needed different information. Their site was up and down all day, but I tried one more time at 5 pm and bingo we got in.
So, many thanks to you and everyone at NJGCA for being there for us small businesses. These loans/grants will help us to continue our business. We are a pretty private family, you may use my information, but would appreciate you not using our name.
Thank you again. We wish you well.
I was approved for a $xxx,xxx EIDL. The loan docs came to me last night. The included info., that even with a close reading of the loan docs, leaves a myriad of ambiguities too numerous for my lazy self to enumerate. I talked to my accountant; upon reading the docs, he had all of the same questions I have, but he phrased them in a much more expensive sounding manner. I then found the 300 or so pages of underlying regs for EIDLs on the SBA site. As the loan docs state that I do have up to 2 months to sign, and as the loan comes with the blessing of a 3.75% interest rate, and the curse of much oversight along with very restrictive allowed uses for the money, I’ve decided to wait (and hope) for my PPP, and to also see what the effect of the crisis is on my summer. The EIDL is really designed, and is multiply restricted to be just that: Economic Impact Disaster Loan assistance. I haven’t had a disaster, yet. If I do, I’ll decide then based on the conditions I experience at that time.
I write primarily to let you know that I think I’m pretty well informed on the ins and outs of the EIDL program if anyone, staff or rank and file need another input, and to thank you.
Thank you for giving us the best, the most accurate, prompt and immediate, and the MOST CONCISE information that I have gotten from any source, be that government, other industry groups, PACS, accountants or attorneys. You and your excellent staff are indispensable to me and my business. Period, exclamation point. You have transformed the organization. Please stay well, be happy, and prosper.
NOTE: This member has offered to coach any NJGCA member that is applying for EIDL loans, and share his step by step experience. Contact Michelle at firstname.lastname@example.org for his contact information.