Governor Corzine’s unveiling of a multi-faceted plan to offer assistance to New Jersey residents and long-term economic growth options to help the state emerge from the national economic recession has resulted in two new programs approved by the Legislature and managed by the New Jersey Economic Development Authority (EDA) to support business growth and community investment.
These initiatives emerged following an October address to a joint session of the New Jersey Legislature during which the Governor specified a four-pronged plan of attack:
• Immediate assistance, including foreclosure prevention and help with energy and food costs
• Short-term job creation, focusing on expediting public works projects and enabling community banks to loan funds to local businesses
• Long-term business climate changes, specifically regarding tax policy and the cultivation of alternative energy projects
• Continued fiscal responsibility on the state level by keeping state spending in check
Focusing on these four areas would not isolate New Jersey from the economic problems facing the rest of the nation and the world, Governor Corzine said, but it would help position the state for a strong recovery.
Understanding that our communities are in need of tools to assist small business and keep jobs in New Jersey, the Governor signed two pieces of legislation in December creating the Invest NJ and New Jersey Main Street Business Assistance programs and authorizing a total of $170 million in financial assistance to stimulate capital investment and job creation to help New Jersey businesses face the fiscal challenges of the national economic crisis.
Applications for both of these EDA-administered programs are now available online at www.njeda.com.
Invest NJ The $120-million Invest NJ program includes two components. One provides a $3,000 grant to New Jersey businesses for each new job created and retained for one year. To be eligible, businesses must have operated continuously in New Jersey for at least the prior two years and must employ at least five full-time workers.
The job creation grant component will provide up to $50 million, not to exceed $500,000 per grantee, for each eligible position created after Dec. 1, 2008 and before Jan. 1, 2011 by qualified businesses that experience a net increase in employment of eligible positions in the state during the same 12 consecutive months.
Another element of the program authorizes the payment of grants equal to seven percent of a business’s qualifying capital investment of at least $5,000 made prior to Jan. 1, 2011. Up to $70 million is available for capital investment grants, not to exceed $1 million per grantee, to fund expenses for the direct use and operation of a business.
These expenses may cover site preparation, construction, renovations, improvements, and the purchase of fixtures, machinery and equipment. Under certain conditions, site remediation costs may also be included. To be eligible, business must have operated continuously for at least the prior two years, and must employ at least five full-time workers.
New Jersey Main Street Business Assistance Program This $50-million program enables qualified small and mid-size businesses and nonprofit organizations in New Jersey to access capital by providing state support for bank lending through loan participations and credit enhancements. It has been developed in partnership with the departments of Banking and Insurance and Treasury and the state’s banking community. To qualify, borrowers must be in business at least two years, maintain jobs in New Jersey and meet other EDA eligibility requirements.
This program also has two parts—a loan participation and/or guarantee product that is being offered by the EDA through participating banks and a line of credit guarantee offered to the EDA’s 13 Preferred Lender partners. The EDA Preferred Lender Program was created to streamline the EDA’s loan-approval process and speeds the flow of capital to growing businesses in the state. The EDA’s current list of Preferred Lenders includes Bank of America, Capital One Bank, TD Bank, Cornerstone Bank, Columbia Bank, New Jersey Community Capital, Peapack-Gladstone Bank, PNC Bank, Roma Bank, Sovereign Bank, Sun National Bank, Susquehanna Bank and The Bank.
For fixed assets such as buildings and equipment, the EDA will provide a maximum participation of 25 percent, or $1 million, in a bank loan and a maximum bank loan guarantee of 50 percent, up to $2 million. For working capital loans to cover operating expenses, the EDA will provide up to 25 percent of a bank loan, not to exceed $750,000, and a maximum guarantee of 50 percent, up to $1.5 million. The aggregate EDA exposure cannot exceed 50 percent of the bank loan amount, or $2 million. The interest rate on EDA loan participations will be fixed at 5 percent for a maximum of five years. Borrowers will also be able to use the Main Street program to refinance higher-interest debt.
The line of credit guarantee, which may also cover fixed assets or working capital, will be set at a maximum of 50 percent of the bank amount, up to a maximum of $250,000.
There are many businesses out there that want to stay and grow in New Jersey and the state is trying to make it easier for them to succeed. At the EDA, we are working with our banking partners to get the money flowing again.
For more details about Invest NJ or the New Jersey Main Street Business Assistance Program and to access applications, visit www.njeda.com. For more information about doing business in New Jersey, visit www.NewJerseyBusiness.gov.
Governor Jon Corzine signs the Main Street legislation
on December 16 in the EDA lobby in Trenton.