The New Jersey Economic Development Authority (NJEDA) approved the creation of a pilot loan program to provide financing to early stage and microbusinesses in New Jersey, furthering Gov. Phil Murphy’s commitment to providing better support for small businesses – a critical component of the Governor’s plan for building a stronger and fairer New Jersey economy.
Governor Murphy signed Executive Order #91 yesterday, establishing a Public Bank Implementation Board, which will be tasked with planning the development of a public bank for the Garden State. Under Governor Murphy’s vision for a public bank, public funds could be directed toward reducing unmet community capital needs. The Microbusiness Loan Program will serve as the initial demonstration project for how a public bank could serve to make financing available, at a low-cost and with flexible terms, to early-stage businesses that may have difficulty accessing conventional bank financing.
Through the Microbusiness Loan Program, the NJEDA will make financing of up to $50,000 available to for-profit New Jersey businesses, who can use the financing for working capital or to purchase equipment. To ensure that the financing is accessible to the early-stage and microbusinesses that need it most, to qualify, a business must have annual revenues of less than $1,500,000 in the most current fiscal year, and cannot have more than 10 full-time employees at time of application. Startup businesses may be eligible for financing, but must first demonstrate that they have completed an entrepreneurship training program or Small Business Development Center counseling sessions.
“Governor Murphy’s comprehensive economic plan for building a stronger and fairer New Jersey economy prioritizes support for aspiring entrepreneurs and small businesses that have struggled to access capital,” NJEDA Chief Executive Officer Tim Sullivan said. “The pilot phase of the Microbusiness Loan Program will expand the NJEDA’s reach to include smaller and earlier-stage businesses than we have traditionally assisted, while evaluating the potential long-term effectiveness of the program.”
The Microbusiness Loan Program will operate as a pilot program for a period of up to three years from the date applications are made available to the public, or until the $1,000,000 total funding pool is fully exhausted.
“Access to funding is a common obstacle to successfully growing a business,” said Christina Fuentes, NJEDA Director of Small Business Services. “That is why the Microbusiness Loan Program is the latest in a host of products and resources that the NJEDA has recently established to broaden its support for New Jersey small businesses.”
Last year, the NJEDA realigned its operations to create a new small business-dedicated team, and has since introduced a variety of new small business programs including the Small Business Lease Assistance Program, which offers reimbursement of a portion of lease payments for businesses leasing new or additional space in targeted communities; and the Access Program, which ensures that more small businesses can access NJEDA financing by utilizing underwriting criteria that places greater emphasis on the borrower’s cash flow and less emphasis on hard collateral. Most recently, the Community Development Financial Institution (CDFI) Initiative was introduced by the NJEDA to support community financing organizations, who make financing available to New Jersey small businesses, many of whom have difficulty accessing conventional bank financing. In addition, the NJEDA recently teamed up with Governor Murphy’s Office, the state’s Office of Innovation, and the New Jersey Business Action Center to launch a beta version of Business First Stop, a one-stop-shop website that offers business owners resources to start, operate and grow their businesses.
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