New Jersey has a lot going on when it comes to encouraging and nurturing entrepreneurship in the state. While there are numerous factors that help and support entrepreneurship, I will address what I consider to be the most important aspects.
For starters, New Jersey’s education system consistently earns high marks for student achievement and chances for success. The state also ranks high in technology development and ranks as the 12th highest state in Science Technology Engineering and Mathematics employment. Many of its higher education institutions not only support entrepreneurship programs, but are encouraging students to start small ventures. Combine this with an educated and skilled workforce and an exceptional transportation hub that can move goods worldwide, and you have a great place to start a business.
The climate for doing business in New Jersey is continuously improving. The US Small Business Administration’s (SBA) New Jersey district office has been seeing growth in the number of loan approvals the agency has made over the last two years. In fact, New Jersey saw a 12 percent increase in loan approvals during the first six months of fiscal year 2014. From October 1, 2013 thru March 31, 2014, the SBA approved 590 loans for $295 million, compared to 528 loans for $315 million during the same period last year.
Lender confidence is also on the rise. We’re seeing an increased interest from lenders in SBA loan products, which are translating into more loan approvals across the board. Obviously, this is great news for New Jersey small business owners and our local economy. While numbers only tell part of the story, the following is a great example of a company that is taking advantage of what New Jersey has to offer.
Cibao Meat Products, Inc. of the Bronx was started in 1969 by the late Siegfried Vieluf in Washington Heights and is well known in the Hispanic community for its signature salamis and sausages. After 20 years at its Bronx facility, Heinz Vieluf Jr., a third generation owner, and his family realized that they were nearing full capacity and started to scout facilities in New York and New Jersey. After finding the perfect building and location in Rocakaway, New Jersey, it then turned to the SBA for assistance with financing the building, as well as machinery and equipment needed to modernize the plant facility.
The Vielufs began working with Hector DaCosta of New Jersey Business Finance Corp (NJBFC) of Fort Lee, one of five SBA Certified Development Companies in New Jersey that package 504 loans. The SBA 504 loan is designed to assist small businesses like Cibao Meat Products obtain long-term financing for capital assets like the purchase of real estate and costly equipment. With financing available for up to 90 percent of the project cost, SBA 504 loans offer an affordable down payment and a fixed interest rate, enabling the entrepreneur to conserve working capital and retain liquidity to meet operating needs.
For this particular 504 loan, NJBFC teamed up with the SBA to provide the Vielufs with 35 percent of the financing for the project, while Citibank provided financing for 50 percent. The Vielufs were required to put up 15 percent of the project, which helped them to purchase the real estate and equipment that would help increase production. In total, Cibao Meat Products, Inc. needed approximately $12 million in financing. SBA and NJBFC funded $3.2 million for the machinery and equipment and another $1.4 million for the purchase of the real estate in Rockaway.
The expansion of the company from its 9,200-square-foot facility in New York into a 74,000-square-foot plant in New Jersey is going to take the company to a much higher level. It will be producing more products, growing its distribution network and increasing market share profitability and its workforce.
The Vielufs originally wanted to stay in New York, but the combination of easy access to major highways, a skilled workforce and the cost of real estate (which bought them a better facility in New Jersey) helped convince them to make the move. By this October, Cibao Meat Products, Inc. will have relocated to New Jersey with 65 employees and the potential to add more jobs over time.
Giving small businesses access to capital is one of the most effective ways to create economic growth and development throughout the state. Small business owners like the Vieluf family know that they can count on SBA as a valuable resource to help them find: capital to finance their ventures; business counseling to guide them to growth; and government contracting as a way to expand their markets.
If you are a small business owner, then the SBA New Jersey district office can assist you.
For an overview and additional information on SBA loan programs, visit the SBA website at www.sba.gov/finance.
Also, free business counseling is still a major staple in the SBA took kit. Our affiliations with: SCORE, www.SCORE.org; the New Jersey Small Business Development Centers, www.NJSBDC.com; and the Women’s Center for Entrepreneurship Corporation, www.wcecnj.org, provide our clients with expert advice in writing a business plan, developing a loan proposal, conducting market research, marketing their business, business operations, social media, inventory, accounting practices and cash flow.
It’s all the ingredients you’ll need to find success in New Jersey.
For additional information, contact the SBA New Jersey district office at:
US Small Business Administration
New Jersey District Office
Two Gateway Center – Suite 1501
Newark, New Jersey 07102
Tel: (973) 645-2434
Fax: (973) 645-6265
Website: www.sba.gov/nj
www.facebook.com/SBAgov