Application Deadline for $60 Million Net Operating Loss Program Extended to September 30, 2020
TRENTON, N.J. (July 1, 2020) – Governor Phil Murphy signed Executive Order 159 yesterday, extending the deadline for technology and life sciences companies to apply for the State’s 2020 Technology Business Tax Certificate Transfer Program, better known as the Net Operating Loss (NOL) Program. These companies now have until September 30, 2020 to submit their applications. The application can be found at https://www.njeda.gov/nol.
Through the NOL Program, New Jersey businesses can apply to sell their net operating losses and/or unused research and development (R&D) tax credits in exchange for non-dilutive capital. The deadline for the annual program, which is traditionally June 30, has been extended this year due to the COVID-19 pandemic. The New Jersey Economic Development Authority (NJEDA) works collaboratively with the New Jersey Department of Treasury’s Division of Taxation to administer the program.
Heralded as a lifeline for companies that have not yet reached profitability, the capital raised through this program can be used for costs including, but not limited to, the expenses of fixed assets, such as the construction, acquisition and development of real estate, materials, start-up, tenant fit-out, working capital, salaries, and research and development expenditures.
“New Jersey’s early-stage technology and life sciences businesses will play a critical role as we move into a post-Coronavirus economy and connecting these companies with the funding they need to succeed is one of our top priorities,” said NJEDA Chief Executive Officer Tim Sullivan. “As we continue to find new ways to provide much-needed funding to businesses within New Jersey’s innovation ecosystem, the NOL Program has been a proven mechanism for helping small businesses through their most difficult periods.”
Over 540 businesses have been approved for more than $1 billion in awards through the NOL Program since its inception in 1999. Last year, 46 companies were approved to share $60 million through the NOL Program, the maximum amount of funding allocated for the program. This was the second year in a row that the program hit its cap.
The NOL Program offers numerous benefits to its participants, including:
- The funding is non-dilutive, meaning that entrepreneurs do not have to give up equity in their companies to receive the money;
- Emerging companies can use the funding they receive as working capital, and the businesses to which they sell are able to lower their tax burden;
- The average historical award is over $1 million;
- Nearly 90 percent of applicants successfully receive funding;
To participate in this year’s NOL Program, companies must apply online by September 30, 2020. New Jersey state taxes must be filed in order to participate in the program.
For more information on the NOL Program, including frequently asked questions, a complete list of eligibility requirements, and program details, please visit https://www.njeda.gov/nol. Questions about the NOL program may be submitted to email@example.com.