MAIN STREET ACQUISITION SUPPORT GRANT

The Main Street Acquisition Support Grant product is a pilot product under the Main Street Recovery Fund that will offer a grant of up to $50,000 to reimburse an eligible NJ small business for closing costs related to a New Jersey commercial property that the business purchased to operate from.

AMOUNT

Applicants may request a grant of up to $50,000

One grant per EIN for a maximum of one location (verified by the business’s employer identification number, or EIN)

BENEFITS

Reimbursement of closing costs to eligible NJ small businesses that have purchased a commercial property in which their business will operate from

ELIGIBILITY

For-profit or non-profit entities meeting the various requirements outlined in the “Eligibility” tab below

Must meet the SBA definition of a small business based on their NAICS code

Closing must have taken place after the application was open to the public and grant application date must be no later than one year from date of closing

PROGRAM DETAILS
ELIGIBILITY
AWARD SIZE
FEES

PROGRAM DETAILS

The Main Street Acquisition Support Grant will be a grant product that will offer a reimbursement of closing costs up to $50,000 to eligible NJ small businesses that have purchased a commercial property in which their business will operate from. This product will help support small business that have made a substantial investment and recently purchased a commercial building, the closing must occur after the application for this product is made available to the public, and the application for the grant must be made no later than one year from closing in order to be eligible.

As part of the process to acquire a commercial property, the small business would go through an underwriting and closing process and must close on a loan through a conventional lender, ensuring that the applicant meets the necessary debt service coverage ratio to qualify for the loan. For the purposes of this product, the Authority will consider a conventional lender to be any SBA lender, CDFI, MDI, bank, credit union, or any state, county, city administered loan with underwriting standards.

Once the closing on the commercial property is complete, the small business owner would then apply to NJEDA for the grant.

The Main Street Acquisition Support Grant is only available to small businesses after a real estate closing, and businesses are not eligible to apply in advance of a scheduled closing. This is to ensure that the business has adequately demonstrated to their lender the ability to repay their mortgage. However, despite the fact that this grant is a reimbursement of a portion of closing costs, it will still provide a liquidity infusion during the early stage of property ownership, which can be a financially stressful time, particularly if the property needs renovations or improvements.

The NJEDA will require that the property remains occupied by the grantee for a minimum of five years. If the property is sold, fully leased, or the applicant no longer occupies their minimum square footage prior to the end of the five-year compliance period, then the grant recipient will be required to repay a pro-rated portion of the grant. Repayment of the grant will be prorated based on the years of compliance, with 20% reductions for each full year the applicant is compliant with the terms of the grant.

ELIGIBILITY

Eligible Applicants

Eligible applicants, which can be for-profit or non-profit entities, must also meet the following requirements:

Must meet the SBA definition of a small business based on their NAICS code.
Closing must have taken place after the application was open to the public and grant application date must be no later than one year from date of closing.
Applicants must provide a current Tax Clearance Certificate from the NJ Division of Taxation prior to receiving NJEDA approval.
Applicants must be in substantial good standing prior to approval with NJEDA, the NJ Department of Labor, and NJ Department of Environmental Protection, with all decisions of substantial good standing at the discretion of those entities.
Only a new purchase is eligible; the closing cannot be a refinance of an existing loan. The property purchased can’t be for residential use only, and vacant land is not eligible.
If a real estate holding company purchases the property, the small business that will be occupying the location must apply, however it must meet the SBA’s definition of a small business that will be located on and operate from the purchased property. The small business must either wholly own the real estate holding company, or the ownership of both entities, and percentage of ownership, must be the same. In such situations, the small business will be the applicant and the holding company will be a co-applicant. If the holding company that purchased the property does not have the same owners or ownership percentage as the small business or is not wholly owned by the applicant, then the applicant will be ineligible for this product. Loan must be an arm’s length transaction with a conventional lender (SBA, CDFI, MDI, bank, credit union, or any state, county, city administered loan with underwriting standards accepted) Awardee must certify to operating a commercial business from the NJ project location/building that was purchased for a five-year compliance period.
Applicants are permitted to lease a portion of the purchased property to a third-party.

Eligible Projects

Applicant must meet the following requirements to be eligible under this grant product:

Provide a HUD-1 statement (may be in the applicant or real estate holding company associated to the applicant) to identify all closing costs the applicant was required to pay at the time of closing. Grant will be based on line 1400 of HUD1 (due from borrower column minus the business purchase price or any payoffs). If applicant doesn’t have a HUD-1 then it must provide Closing Disclosures or Settlement Statements to support the closing costs paid minus the purchase price of the building, business, or any payoffs.
Closing must have taken place after the application was open to the public and grant application date must be no later than one year from date of closing.
Small business must occupy at least 1,000 square feet of total usable square footage of the building.

AWARD SIZE

Up to $50,000.
One grant per EIN for a maximum of one location (verified by the business’s employer identification number, or EIN).

FUNDING DISBURSEMENTS

Grant amount to be fully disbursed after execution of grant agreement.

FEES

$500 fee is due at time of approval.

Board Memo PROGRAM SPECIFICATIONS MAIN STREET RECOVERY FINANCE PROGRAM Program FAQs

QUESTIONS

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.