The board of the New Jersey Economic Development Authority on Wednesday approved a revision to the Main Street Micro Business Loan, removing the requirement for personal guarantees from owners of microbusinesses.
The program is a successor to the Micro Business Loan Program established by the EDA in 2019, and will provide financing of up to $50,000 to eligible microbusinesses in New Jersey with 10 or fewer full-time employees and no greater than $1.5 million in annual revenues.
The NJEDA will start accepting applications for the program on Oct. 6.
“The Main Street Micro Business Loan will be a tremendous asset for small businesses that are working hard to grow their footprint in the Garden State,” NJEDA CEO Tim Sullivan stated. “Removing the barriers to capital for our state’s smallest businesses is another step toward achieving Gov. (Phil) Murphy’s vision for a stronger, fairer economy, as more microbusiness owners will now have access to the financing they need to create more family-sustaining jobs and economic opportunities.”
The Main Street Recovery Fund 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%, with no interest and no payments due for the first year.
To ensure equitable and inclusive access to the Main Street Micro Business Loan, of the $20 million in total funding available, $8 million will be set aside to support eligible entities located in New Jersey Opportunity Zone-eligible census tracts.
Nonprofit, for-profit and home-based microbusinesses 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 revenue);
- Must have no more than 10 full-time employees;
- 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 Department of Labor & Workforce Development and Department of Environmental Protection at the time of application to be eligible for a microbusiness loan;
- Must provide a current tax clearance prior to approval to demonstrate the applicant is in good standing with the Division of Taxation.
Applications for the Main Street Micro Business Loan will be reviewed on a first-come, first-served basis, based on the date/time at which the EDA receives the completed application. Past recipients of the Micro Business Loan Program are eligible to apply for the Main Street Micro Business Loan. Due to the favorable terms of this product, only one application per EIN is allowed.
For more information on the Main Street Micro Business Loan and the application process, click here.