The New Jersey Economic Development Authority (EDA) has been called New Jersey’s bank for business. While larger projects garner much of the attention in the state, the EDA has many options available to small- and medium-sized businesses as well. Here’s a look at some of the recent activity.
Angel Investor Tax Credits. NJBIA supported the creation of the Angel Investor Tax Credit Program as well as its later expansion. The program offers tax credits to investors who come through with funding at a crucial period in a startup company’s operation.
Since its creation in 2013, the Angel Investor program has awarded tax credits in connection with 680 investments totaling $234.3 million in 53 New Jersey emerging technology companies. Furthermore, the program seems to be helping New Jersey’s reputation as an innovation state; EDA has reported that several early-stage companies include information on the Angel Investor Tax Credit Program in their investor pitch. The ability for investors to enhance their rate of return helps make New Jersey more attractive to entrepreneurs.
Garden State Growth Zones. Created under the Economic Opportunity Act of 2013, the Garden State Growth Zones (GSGZ)were designed to help support the commercial areas of economically depressed cities like Atlantic City, Camden, Trenton, Passaic and Paterson. The EDA also created two programs aimed at helping small businesses grow in these communities as well. The GSGZ’s Business Improvement Incentive (BII) offers grants to businesses operating within the first floor of a commercial corridor that are planning to make building improvements, and the Business Lease Incentive (BLI) offers reimbursement of a percentage of annual lease payments to businesses and nonprofit organizations in eligible areas for a minimum five-year term.
$33.3 Million in Federal Funding. EDA has allocated $33.3 million from the State Small Business Credit Initiative. It has invested this money in three venture capital funds, which provide additional private investments of their own. The 18 businesses that received investments expect to create 230 new jobs and maintain 537 employees. EDA also provided direct loans and loan guarantees to 41 businesses, creating an anticipated 546 new jobs and maintaining nearly 2,000 more.
These three programs are just a small sample of what EDA does. Overall, the agency provides direct loans and loan guarantees, and administers the tax credits and other incentives to ensure companies meet the job creation and capital investment requirements that come with them.
In 2016 (the most recent year for which data is available), it provided more than $1.562 billion in economic assistance to 571 projects that produced $2.4 billion in total investment and resulted in the creation of 10,216 new jobs.