DIRECT LOANS
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New Jersey businesses in need of financing and committed to job creation/ retention may be eligible for Direct loans through the NJEDA when conventional financing is not available.
Up to $2 million for fixed assets
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Up to $750,000 for working capital
Lower interest rates
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Longer terms
Businesses must commit to the retention and/or creation of one new full-time job for every $65,000 of NJEDA exposure within 2 years.
1.1x debt service coverage ratio; 1.0x debt service coverage for non-profits.
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Must be able to provide fixed assets (e.g. real property and machinery/equipment).
Homebased businesses are ineligible.
Direct loans are one solution in the NJEDA’s portfolio of programs designed to increase access to capital and support the growth of small businesses in New Jersey.
PROGRAM DETAILS
New Jersey businesses in need of financing and committed to job creation/retention may be eligible for direct loans through EDA when financing is not available under other EDA financing programs.
Up to $2 million for fixed assets*, or up to $750,000 for working capital to be used for fixed assets or working capital
Direct Loans offer companies lower interest rates, longer terms, and a fixed rate.
EDA direct loans provide the following terms: Up to 5 years for working capital, up to 10 years for new equipment and 5 years for used equipment, and 20 years for real estate transactions.
Based on the 5-year US Treasury or floor of 1%, whichever is higher, with basis point additions for credit risk.
* Pursuant to P.L.2017, c.261, direct loans of up to $3 million may be available to qualified businesses in targeted urban centers, regional centers, and metropolitan planning areas.
ELIGIBILITY
To be eligible for this program, the applicant must*:
- commit to the retention and/or creation of one new full-time job for every $65,000 of NJEDA exposure within 2 years;
- have a 1.1X Debt Service Coverage Ratio (for businesses; 1.0X Debt Service Coverage Ratio (for nonprofits);
- have been in operation for at least 2 years; and
- be able to provide fixed assets (e.g. real property and machinery/equipment).
Homebased businesses are ineligible.
*Other credit criteria may apply
TERMS
Based on the 5-year US Treasury or floor of 1%, whichever is higher, with basis point additions for credit risk.
FEES**
- Application Fee: $1,000
- Commitment Fee: 0.875% of loan amount
- Closing Fee: 0.875% of loan amount
** All fees are non-refundable
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) online portal.
- 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.
- Additional, instructions detailing how to secure your tax clearance certificate are available for download.
Please be advised: It is the applicant/client’s responsibility to maintain a current and clear tax clearance certificate. If a current and clear certificate is not evidenced to NJEDA at time of closing, NJEDA will not proceed with closing.
PREVAILING WAGE
Projects utilizing NJEDA financial assistance for construction related costs are subject to state prevailing wage requirements.
Effective April 1, 2020, all construction contracts in which prevailing wage applies must provide proof of valid NJ Department of Labor Construction Registration Certification. Please email PWCR@dol.nj.gov if you have any questions about this requirement. Please be advised that a valid Contractor Registration Certificate is required to perform construction on this NJEDA financially assisted project.
Checking your eligibility or exploring your financing options? START HERE:
QUESTIONS
Connect directly with your area’s NJEDA Business Banking Representative
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Additionally, for more information or to ask a specific question, please send an email to BusinessBanking@njeda.gov and a team member will reach out to you.