The New Jersey Economic Development Authority (NJEDA) opened applications this week for its 2023 Technology Business Tax Certificate Transfer Program, commonly known as the Net Operating Loss (NOL) Program. The program enables early-stage technology and life sciences businesses in the Garden State to sell a percentage of their New Jersey net operating losses and unused research and development (R&D) tax credits to unrelated profitable corporations for cash.
The NOL Program is accepting applications through June 30 at http://www.njeda.com/nol. Participants can use the capital raised through the NOL Program to help cover allowable costs incurred in connection with operating their businesses such as salaries, R&D, and other working capital expenditures.
The New Jersey Economic Recovery Act of 2020 (ERA) increased the program’s annual cap from $60 million to $75 million. It also increased the lifetime cap for an individual applicant from $15 million to $20 million.
“It’s fitting that the application for this year’s NOL Program opened during Small Business Week, as the program routinely helps companies keep their lights on, their employees paid, and propels their research and development forward,” said NJEDA Chief Executive Officer (CEO) Tim Sullivan. “Enhancements made to the program by the ERA help ensure emerging companies have access to the capital they need to succeed, which is a key component of fulfilling Governor Murphy’s vision to establish New Jersey as a leader in innovation.”
In line with Governor Murphy’s vision to create the most diverse and inclusive innovation ecosystem in the nation, $15 million of the $75 million program allocation will be reserved for the surrender of transferable tax benefits exclusively by eligible companies operating within the boundaries of the state’s three Innovation Zones of Newark, Camden, and the Greater New Brunswick area, companies located in Opportunity Zones, and/or women- or minority-owned businesses certified by the State of New Jersey.
Potential applicants interested in learning more should visit the program website, which covers eligibility requirements in detail at http://www.njeda.com/nol and attend the NJEDA’s upcoming NOL Program webinar on May 9. Registration can be found at http://www.njeda.com/nol. A recording of the webinar, which will include a walk-through of the application, will be available at http://www.njeda.com/nol following the event.
Since the program’s inception in the late 1990s, more than $1.17 billion in funding has been distributed to over 570 technology and life sciences companies. The average award for companies approved to sell their net operating losses through the program in 2022 was over $3.1 million.
“Given the broad range of acceptable funding uses, the NOL Program has been hailed for decades as a lifeline for emerging companies that have yet to reach profitability,” said NJEDA Chief Economic Transformation Officer Kathleen Coviello. “The ability to secure an average award of over $3 million without giving up any equity makes this extremely attractive to entrepreneurs. At the same time, it complements the state’s many assets as an attraction tool for entrepreneurs choosing to grow their businesses in New Jersey.”
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