The New Jersey Assembly last week approved legislation, designated as S-3052 and A-4336, that would create a Small Business Loan Program. The bill passed both houses of the state legislature and went to Governor Chris Christie for his review on December 5, 2011. If the governor signs it, it could quickly have a positive effect on the New Jersey economy and offer new opportunities for New Jersey’s small businesses.
The bill was first introduced in the state senate on September 19, 2011 and referred to the Senate Economic Growth Committee. The Committee reported on it favorably on September 22, and it passed the state senate unanimously (39-0) on September 26. The Assembly received it on November 10 and referred it to the Assembly Commerce and Economic Development Committee. The bill was reported out of the Committee on November 21 and sent to the Assembly Appropriations Committee. That Committee reported favorably on it on December 1, and the Assembly passed it on a 52-23-3 vote on December 5.
If the bill is signed into law by the governor, it will instruct the state’s Economic Development Authority to initiate a program to provide low-interest loans to New Jersey small businesses that commit to meet certain goals. Businesses could use loan funds to acquire capital, train new employees, and pay salaries. To qualify for a loan, a business must make a commitment to raise its employment levels by 10 percent or more over a four-year period. Qualifying businesses must have their primary business operations, as well as a physical place of business, in the state of New Jersey. They must be owned and operated independently and not be the dominant business in their field. They must have fewer than 100 full-time employees, less than $10 million in equity financing, and less than $10 million in total financing. Loans up to $250,000 would be available at annual interest rates of two percent or less.
Authorities say that the program would support itself through loan repayments and interest, adding no additional costs to the state government. Senators who sponsored the bill tout its ability to stimulate economic growth by offering small businesses an incentive to acquire capital and add jobs. It would hopefully open the door to new financing opportunities for small businesses that have struggled in the difficult economic conditions of the past few years.
New Jersey’s unemployment rate hovers around nine percent, although this number could overlook people who are under-employed or have given up looking for full-time employment altogether. A ten percent increase in the small business workforce could potentially add thousands of new jobs to the state economy. Small businesses are the real job creators, so this legislation is a welcome opportunity to support and encourage New Jersey’s small businesses to grow and expand.
The New Jersey business attorneys at Samuel C. Berger, PC offer fixed-fee legal services to businesses and investors who want to do business in northern New Jersey and New York. To speak to a member of our skilled legal team, contact us today online or at (201) 587-1500.