A Wealth of Public-Sector Assistance

The future is optimistic for small businesses striving to succeed in New Jersey.

By Lorna Pappas, Contributing Writer On Oct 16, 2017

Regardless of claims that New Jersey is too expensive and challenging for small businesses to start up and thrive, assistance provided by public sector entities is reducing or even removing these hurdles – and creating a very optimistic outlook for the state’s small businesses.

Following is a look at several public support vehicles provided by New Jersey organizations, all dedicated to stimulating small business growth throughout the state.

US Small Business Administration, New Jersey District Office

A big player in the state’s economic development, the Small Business Administraiton, New Jersey District office (SBA/NJ) focuses its support on three pillars to success: Business counseling, capital and government contracting.

Business counseling is provided through several resources. One is SCORE, a national source of free, confidential business education and mentoring. With five offices in New Jersey, SCORE is comprised of active and retired executives who volunteer their time to provide small business counseling.

The SBA/NJ also maintains two Women’s Business Centers and the New Jersey Small Business Development Centers, a 12-center network, funded by the SBA and the State of New Jersey, which serves small business owners and entrepreneurs across the state.

The second pillar is capital. Through its partnerships with more than 100 lenders, the SBA/NJ provides the capital – anywhere from $5,000 to $5 million – needed to launch a small business.

“Our lending programs really set us apart,” Alfred Titone, district director of SBA/NJ, states. “This year we are on pace to approve more than 1,800 loans. Through July 2017, we approved 1,728 loans for $686 million. That’s a 22 percent increase in loan approvals, a 2 percent jump in dollar volume over last year, and a new record high.”

Roughly 33 percent of SBA/NJ loans go to startup companies while 67 percent go to existing companies for growth and expansion. As of July 2017, SBA/NJ loans have accounted for the creation and retention of 15,000 jobs in New Jersey.

The third pillar is contracting, or How to Do Business with the Federal Government. “We recommend this pillar for people who have been in business two or more years and have a track record in government contracting on a local and/or state level before exploring the federal contracting opportunities,” Titone explains. “We believe all small businesses should be looking at contracting as a way to increase their bottom lines.”

The New Jersey Business Action Center

In cooperation with its partners, the New Jersey Business Action Center (BAC) helps startups and early-stage businesses access a variety of services that help them start or grow. These include: consulting and mentoring services; financial resources; permitting and regulatory assistance; guidance on how to compete for government contracts; and assistance on discovering or expanding export opportunities, including financials awarded to qualified exporters. The BAC also provides financial support for the SBA/NJ’s New Jersey Small Business Development Centers.

The newest programs from BAC for small businesses, administered by partners at the Economic Development Authority, are the Business Lease Incentive (BLI) and the Business Improvement Incentive (BII) programs. “These new programs were specifically designed to assist businesses willing to lease or improve space in designated commercial corridors such as Garden State Growth Zone cities,” Don Newman, director of small business advocacy for the BAC, reveals.

“The biggest challenges that early-stage businesses face is being undercapitalized,” Newman says, “which is caused by insufficient planning. They need an appropriate business plan that should include financial plans with cash flow projections and properly scaled operational systems. Seeking capital later is always more difficult because it usually means you are in a less favorable position to qualify for financing. We can assist businesses in developing or improving these plans.”

During the last fiscal year, the BAC worked with 44,241 businesses, Newman reports.

New Jersey Small Business Development Centers

The state’s 12 New Jersey Small Business Development Centers (NJSBDC) – funded by the SBA and the State of New Jersey, with money funneling through the BAC – comprise a public-private-educational network, which is part of a national network of SBDCs.

The New Jersey centers are located at different higher education host institutions across the state “to provide the appropriate collaborations that exist between the SBDC program and college/university faculty and students to support experiential learning while providing support for special studies and projects in connection with small business clients,” Deborah Smarth, COO and associate state director of the NJSBDC, explains. “Our NJSBDC experts around the state have experience as small business owners themselves or come from private sector management.”

The centers and specialty programs provide comprehensive assistance for small business owners and entrepreneurs in all 21 counties. This includes one-on-one business advisory services and management consulting customized to a specific client’s business needs. “We also sponsor and instruct business training seminars on various topics; assist with loan packaging and obtaining financing; and provide other forms of technical assistance,” Smarth adds.

Last year, the NJSBDC network provided no-cost, one-on-one counseling to more than 4,200 small business owners with a total of 19,514 counseling hours. The network’s combination of business counseling and training seminars helped clients create and retain more than 16,000 jobs in the state. The network also helped facilitate $88.3 million in financing for its clients, helping to start and expand businesses throughout the state. This year, the network is on track to help facilitate $100 million in financing to its clients.

New Jersey Economic Development Authority

When raising capital is an issue, many small businesses turn to the New Jersey Economic Development Authority (NJEDA), which offers a range of customizable financing options. These include direct loans of up to $2 million for fixed assets of up to $750,000 for working capital, and access to capital through NJEDA’s partnerships with local banks and other financial institutions. The NJEDA also offers tax-exempt bonds for manufacturers and not-for-profit organizations, and has a portfolio of programs dedicated to supporting the growth of emerging technology and life sciences companies.

Through its partnership with the UCEDC – a non-profit providing microloans as well as financial and technical training and counseling to the small business community – the NJEDA expanded its role beyond financing to include a range of training, business literacy and technical assistance services. The EDA/UCEDC venture trained or mentored more than 2,000 entrepreneurs in 2016 alone, conducted 123 business training workshops, and provided $3.8 million in loans to 87 small businesses, 78 percent of which were minority- or woman-owned enterprises.

“Access to capital is one of the biggest issues faced by startup and early-stage businesses,” Melissa Orsen, CEO of the NJEDA, states. “But no amount of financing will help get an idea off the ground if the homework of formulating a business plan and defining the resources needed to both hire and acquire hasn’t been done.”

NJBIA’s Member Action Center and Municipal Assistance Program

NJBIA’s Member Action Center (MAC) assists businesses with state and local questions and issues through its network of extensive government contacts. The center also provides a free legal hotline, operated by Jackson Lewis PC, which every month provides NJBIA members with 30 minutes of free legal consultation about employment and labor matters. It also offers business guidance via experienced, in-house HR and business consultants.

Last year, the MAC helped to resolve more than 800 business questions. Issues generating the most questions included healthcare and employee leave. More than half of the businesses relying on MAC services had less than the 50 employees. Large employers used MAC services for very technical questions. While the group doesn’t provide tax or legal advice, it does point troubled businesses in the right direction, or provides key contacts who may help resolve an issue.

In March 2017, NJBIA expanded employer support by launching the Municipal Assistance Program (MAP). As the MAC does on the state level, the MAP helps businesses with local issues, such as zoning, permitting and municipal approvals, identifying municipal procurement opportunities and interpreting local rules, regulations and public contract laws. The MAP utilizes the expertise of William G. Dressel Jr., the long-time executive director of the New Jersey League of Municipalities.

“NJBIA’s government affairs team is one of the strongest and best in the nation in advocating for streamlining regulations and necessary reforms, but many businesses still need real-time help,” Stefanie Riehl, vice president of member value for the MAP, maintains. For example, whereas Pennsylvania has just several pages of regulations on dumpster rentals and waste removal, New Jersey maintains volumes. “Without having someone in your corner who really understands state and local government, it can be difficult especially for a startup to know where to turn. That’s where NJBIA’s Member Action Center and the MAP come in.”

Rutgers University’s Food Innovation Center

Rutgers University’s Food Innovation Center (FIC) is a globally recognized food business incubator and economic development accelerator program. The FIC services both domestic and international food businesses with extensive programs in training and workforce development; customized and comprehensive business and technical mentoring services; and FDA- and USDA-inspected facilities that enable design, development, analysis, commercialization and manufacture of value-added food products for sale to retail and foodservice markets.

Lou Cooperhouse, executive director of the FIC, tells New Jersey Business about the three primary services the program provides.

The first is professional mentoring, a virtual management team, to assure the product being developed is really consumer driven. “A startup may have a great idea, but it isn’t always validated by the consumer,” Cooperhouse explains. “It’s important for entrepreneurs to draw on the professional guidance required to understand the consumer and market niche, develop the product to be economically feasible, and determine the pricing, market strategy and sales goals.” Something as simple as participating in a farm market provides valuable personal interactions with consumers to help validate the business proposition.

The second service is help with the infrastructure required to manufacture the product, such as a safe, hygienic, FDA- and USDA-approved food processing facility.

Access to capital – including seed money and working and growth capital – is a third challenge the FIC helps small businesses meet.

“The FIC incubator is really an aggregator that creates a networking environment and interface between supply and demand,” Cooperhouse says. “We fill a critical gap by surrounding the food value business chain with resources such as the EDA; federal, county and grant agencies; action centers; and other business attraction entities, including banks, packaging and advertising companies, website developers and other key resources that bring the food industry together.”

The Future is Bright

These six agencies represent just some of the public-sector assistance available to startups and small businesses working to succeed in New Jersey.

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Index Shows Startups’ Growing Confidence in New Jersey

New Jersey’s Leading Index Value was 2.34 percent as of March 31, which is higher than New York’s 1.62 percent, Pennsylvania’s 2.17 percent and the nation’s 1.66 percent, states Don Newman, director of small business advocacy for the New Jersey Business Action Center.

“This statistic suggests continued economic expansion for New Jersey. Another sign of the impact of New Jersey’s economic develop efforts is our two consecutive record-setting years for new business registrations: New public record business filings for 2015 and 2016 were 97,835 and 103,129 respectively. This demonstrates entrepreneurs’ growing confidence in the economic climate in New Jersey.”

 

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