NJ starting $20M program to help micro businesses
The New Jersey Economic Development Authority is about to launch a new $20 million program designed to help very small businesses.
The Main Street Micro Business Loan program, which is part of the Main Street Recovery Fund created as part of the Economic Recovery Act of 2020, will provide financing of up to $50,000 to eligible micro businesses in the Garden State whose annual gross revenues are $1,500,000 or less, and have 10 or fewer full-time employees.
EDA Chief Executive Officer Tim Sullivan said micro businesses can use the money for “operating expenses, things like buying inventory, rent, capital improvements to a certain extent, really a wide range of potential opportunities here.”
Small biz is vital for NJ
Smaller businesses typically have a harder time getting a loan because banks usually prefer to work with larger companies.
“There are lots of very small businesses out there that employ a lot of people, and if every single one of them was able to grow a job or two you’d be talking about potentially tens of thousands of new job creation opportunities," Sullivan said.
To make the program far-reaching, the NJ EDA Board has approved a program revision that removes the requirement for personal guarantees from owners of micro businesses to be able to get a loan.
In addition, Sullivan pointed out if micro businesses follow all the rules, make their loan payments with no delinquency of more than 90 days, have no current default and are able certify they have used the loan for approved purposes only and they are still opening and operating, “50% of the funding could be converted essentially and be forgiven essentially into a grant, we want that to go into the pockets of small business owners."
Applying for the program
Sullivan said applications can be filed online, starting at 10 a.m. October 6 and “it is first come, first serve.
"I suspect we’ll see a significant number of applications and demand for this funding but I’m optimistic that we’ve got enough funding to support pretty much all of the eligible applicants," he said.
Eligibility requirements for micro businesses interested in applying for this program include:
— Must have less than $1.5 million in annual gross revenue for the most current fiscal year (to the extent the business has annual revenues)
— Must have no more than 10 full-time employees at the time of application and three months prior to application
— Must be legally registered to do business in New Jersey, with a business location (including a home office) in New Jersey
— Must have been formed at least six months prior to the date of application.
— Must be in good standing with the New Jersey Department of Labor and Workforce Development (LWD) and the NJ Department of Environmental Protection at the time of application
— Must provide a current tax clearance certificate prior to approval to demonstrate the applicant is in good standing with the NJ Division of Taxation
The NJEDA will host an information session on the Main Street Micro Business Loan on Monday, September 26, 2022, at 2 p.m. To register for this online session, click here.