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MAIN STREET MICRO BUSINESS LOAN PROGRAM


Coming Soon- Anticipated Early 2022

Main Street Micro Business Loan will provide financing of up to $50,000 to eligible micro businesses in New Jersey with ten or fewer full-time employees and no greater than $1.5 million in annual revenues. The Program is the successor to the Micro Business Loan Program established by the NJEDA in 2019.

PROGRAM DETAILS

Main Street Micro Business Loan will provide low-cost financing of up to $50,000 to eligible micro businesses in New Jersey with ten or fewer full-time employees and no greater than $1.5 million in annual revenues.  The Program is the successor to the Micro Business Loan Program established by the NJEDA in 2019.

With $20 million in funds allocated from the Main Street Recovery Fund, financing from the Main Street Micro Business Loan will cover future operating expenses such as inventory, equipment (that does not require installation or construction work totaling more than $1,999.99) and working capital to fund business operating expenses.

The loan will have a standard 10-year term and the interest rate will be 2 percent, with no interest and no payments due for the first year.

To help ensure all Opportunity Zone eligible tracts in New Jersey receive opportunities for investment that are equitable and inclusive, $8 million will be set aside to support eligible businesses and nonprofits with a primary business location within the 715 census tracts designated as eligible to be selected as an Opportunity Zone.

ELIGIBILTY

Nonprofit, for profit, and home-based* micro businesses interested in applying for the Main Street Micro Business Loan must meet the following eligibility requirements:

  • 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
    • All employees must work in New Jersey as evidenced by WR-30 filings. There is no minimum employee number and sole proprietors are eligible.
  • Must be legally registered to do business in New Jersey, with a business location (other than a home office) in New Jersey
  • Must be in existence, as evidenced by date of formation/incorporation, and in operation for at least six months prior to the date of application being made publicly available
  • Must be in good standing with the New Jersey Department of Labor and Workforce Development (LWD) and NJ Department of Environmental Protection at the time of application to be eligible for a micro business loan
  • Must provide a current tax clearance prior to approval to demonstrate the applicant is in good standing with the NJ Division of Taxation.

One loan per business entity (verified by the business’s employer identification number, or EIN)

Applicants and recipients of the original Micro Business Loan are eligible for this loan if they meet all eligibility requirements.

A business entity with multiple locations (that is, all locations operate under only one EIN) will be limited to one application under this new product (under the sole business entity).

ELIGIBLE USES

  • Future operating expenses, which may be held as working capital to fund such future operating expenses. Examples include payroll, rent, mortgage, utilities, taxes, and inventory
  • Future purchases of equipment as long as installation and construction costs do not exceed $1,999.99

*Home-based businesses cannot use loan, proceeds for any residential costs (i.e. home mortgage/lease payments)

The following are not eligible uses:

  • Refinancing of existing debt
  • Personal, non-business obligations or costs incurred by
  • related entities
  • Construction
  • Equipment requiring installation or construction costs in excess of $1,999
  • Rolling stock – no cars, trucks, or vans can be purchased

FEES

Application Fee: $100 (non-refundable) at time of application

Closing Fee: $400

* All fees are non-refundable.

RATES AND TERMS

Standard 10-year term
The interest rate will be 2 percent for this program, set at approval.

No payments or interest will accrue during the first year after closing. Payments of principal and interest will begin at the beginning of year 2.

No payment term amendments are allowed prior to end of 5th year – all other modifications unrelated to the payment terms may be permitted throughout the term of the loan. If after the 5th year any payment terms are modified, the business will no longer be eligible for forgiveness.

Borrowers may be eligible for the balance of the loan to be forgiven at the end of the fifth year.
To qualify for this forgiveness, the applicant must be

  • not in default
  • current on all loan payments with no delinquency of more than 90 days
  • able to certify that they are still open and operating as detailed in the loan agreement.

LIEN/COLLATERAL/SECURITY

  • No collateral is required
  • Guarantee is required of all owners except for non-profits
  • Risk Rating: expected to be substandard. If the risk rating is found to support an override to a lower risk rating, then staff will do so to reflect the appropriate rating.

TAX CLEARANCE CERTIFICATE

Division of Taxation Tax Clearance Certificate required. Certificates may be requested through the State of New Jersey’s Premier Business Services (PBS) portal online.

Under the Tax & Revenue Center, select Tax Services, then select Business Incentive Tax Clearance. If the applicant’s account is in compliance with its tax obligations and no liabilities exist, the Business Incentive Tax Clearance can be printed directly through PBS.

Instructions on Securing your NJ Tax Clearance Certificate

PROGRAM GUIDE

QUESTIONS

It is recommended that you review the Frequently Asked Questions prior to see if your question has already been addressed.

For more information or to ask a specific question please send an email to smallbusinessservices@njeda.com and a team member will reach out to you.