New Jersey Loan Expansion and Network Development (nj lend)
New Jersey Loan Expansion and Network Development (NJ LEND) is a 3-year pilot program designed to expand NJEDA’s lending capacity to further support the growth and stability of New Jersey-based businesses. Eligible businesses can access up to $5 million in financing to purchase or refinance owner-occupied commercial real estate, acquire equipment, or secure working capital.
Through direct NJEDA loans or partnerships with NJEDA-enrolled Premier Lenders, NJ LEND broadens financing options for both for-profit and non-profit businesses, helping them manage the costs most critical to their operations. This program strengthens NJEDA’s ability to provide comprehensive financial support and ensures businesses have access to the capital they need to successfully navigate today’s evolving economic environment.
LOAN AMOUNTS
Fixed Assets
(Owner Occupied Commercial Real Estate or Equipment)
$2,000,000.01-$5 million
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Working Capital
$750,000.01- $1 million
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Line of Credit Guarantee $750,000.01 – $1 million
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Refinancings are capped at $2.5 million.
BENEFITS
Higher Loan Limits:
Access up to $5 million in financing for owner-occupied commercial real estate, equipment, or working capital needs.
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Flexible Financing Options:
Finance your project through direct NJEDA loans or, in partnership with NJEDA Premier Lenders, through loan participations or line of credit guarantees.
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Favorable Loan Terms:
Terms up to 30 years for real estate, 10 years for equipment, 7 years for working capital.
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NJEDA fixed interest rates based on U.S. Treasury rates.
ELIGIBILITY
New Jersey-based small businesses in operation for at least two full years (nonprofits for at least 3 full years) that:
Have no more than 750 employees.
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Commit to the retention and/or creation of one new full-time job for every $65,000 of NJEDA exposure within 2 years of closing.
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Meet a 1.1x global debt service coverage ratio; 1.0x debt service coverage for nonprofits.
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Secure the loan with fixed assets (e.g. real property and machinery/ equipment).
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Homebased businesses are ineligible.
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Additional eligibility requirements are outlined in the NJ LEND board memo and product specifications.
LOAN AMOUNTS
For NJEDA direct loans:
Fixed Asset Loan (Owner-occupied commercial real estate or equipment):
$2,000,000.01-$5 million
Working Capital Loan:
$750,000.01 – $1 million
For loan participations and line of credit guarantees financed in partnership with Premier Lender banks*:
Fixed Asset Loan Participation(Owner-occupied commercial real estate or equipment):
$2,000,000.01 – $5 million
*NJEDA will participate in up to 50% of the bank loan amount.
Working Capital Loan Participation:
$750,000.01 – $1 million
*NJEDA will participate in up to 50% of the bank permanent working capital loan amount.
Line Of Credit Guarantee
$750,000.01- $1 million
*NJEDA will Guarantee of up to 50% of the bank line of credit amount.
Any request for refinancing is capped at $2.5 million.
Eligible Uses of Funds
The NJ LEND program funds are designated to support businesses through the following uses:
• Purchase or Refinance of Commercial Real Estate: Purchase of owner occupied commercial real estate located in NJ (the business must occupy and operate from at least 51% of the square footage of the NJ commercial property).
• Equipment Acquisition: Purchase of new equipment excluding rolling stock and soft costs.
• Working Capital – permanent working capital for short term operating expenses: Permanent working capital is a non-revolving fully amortizing loan in which the proceeds are used to purchase inventory and support recurring operating expenses paid in the ordinary course of business. The Authority in its sole discretion determines what type of inventories and operating expenses are eligible for working capital support.
Eligible Applicants
Eligible applicants under the NJ LEND pilot program may be for-profit or nonprofit businesses, have an operating location in New Jersey and have no more than 750 employees. All borrowers through NJ LEND must commit to the retention and/or creation of one new full-time job for every $65,000 of NJEDA exposure within two years of closing. Borrowers must secure financing with fixed assets, such as real estate and machinery/equipment. Home-based businesses not using the loan proceeds to purchase a commercial property for its business operations are not eligible for the NJ LEND program.
For-profit businesses must:
• Have been operating and generating revenue and expenses for at least two full years.
• Have at least 50% of personal guarantors with a minimum FICO score of 700.
• Have all individuals or entities with 10% or greater ownership in the business provide unlimited guarantees for the duration of the loan term.
• Meet a historical global debt service coverage ratio of 1.10x.
Nonprofit businesses must:
• Have been operating and generating revenue and expenses for at least three full years.
• Meet a debt service coverage ratio of 1.0x.
**Personal guarantees are not required for nonprofits.
Additional requirements:
All applicants receiving funding through NJ LEND must be in substantial good standing with the New Jersey Department of Labor and Workforce Development, New Jersey Department of Environmental Protection, and NJEDA prior to approval with all decisions of substantial good standing at the discretion of those entities. A current tax clearance certificate prior to closing will be required for the applicant and operating company (if applicable) to demonstrate substantial good standing with the New Jersey Division of Taxation.
RATES & TERMS
The NJEDA interest rate for loans under the NJ LEND program will be based on the equivalent U.S. Treasury rate or a minimum floor of 1%, with additional basis points for credit risk. Terms vary by loan purpose:
• Real Estate: Fixed rates up to 30 years with a maximum loan-to-value of 100%.
• Equipment: Fixed rates up to 10 years with a 90% loan-to-value.
• Working Capital: Fixed rates up to 7 years and must be secured by real estate.
• Line of Credit Guarantee: NJEDA may guarantee the principal amount outstanding on the Premier. Lender bank line of credit for up to two years. The interest rate and other terms of the line of credit will be determined by the credit policy and analysis of the originating Premier Lender Bank.
Additional Terms
The NJ LEND term and amortization will depend on the loan purpose and the useful life of the collateral. For NJEDA Premier Lender Bank loan participations, term and amortization will generally match the loan terms offered by the partner bank, when appropriate. Total NJEDA exposure will not exceed $5 million, and all approvals will be subject to NJEDA’s credit underwriting policy.
Lien/Collateral/Security Requirements
Loans administered under the NJ LEND program will require collateral, such as real estate and/or equipment/machinery, along with liens. Should the NJEDA be the sole lender, the NJEDA lien will be in first position. For NJEDA Premier Lender Bank loan participations, NJEDA will take a subordinate lien on collateral behind the Premier Lender.
Prevailing Wage & Affirmative Action Requirements
Projects utilizing NJEDA financial assistance for construction related costs, including installation, and award of a contract for any construction related work as defined by NJ Department of Labor, are subject to New Jersey Prevailing Wage Act and Public Works Contractor Registration Act requirements.
For projects receiving financial assistance, any contractor or subcontractor hired for construction work and having a total company workforce of four (4) or more employees must provide documentation demonstrating their good faith efforts to employ minority and women workers in each construction trade. This effort should be consistent with the applicable county employment goals established in accordance with N.J.A.C. 17:27-7.2 and align with the affirmative action requirements outlined in N.J.A.C. 19:30-3.5.
FEES
For NJEDA Direct Loans:
Application Fee: $1,000
Commitment Fee: 0.875 % of loan amount, payable at acceptance of term sheet.
Closing Fee: 0.875% of loan amount
For loan participations and line of credit guarantees financed in partnership with Premier Lender banks:
Application fee: $1000
Commitment fee: $750 payable at acceptance of term sheet.
Guarantee Fee: up to 0.5% sized to percentage of guarantee required, with a maximum of 0.5% times the years of the guarantee.
Connect directly with your area’s NJEDA Business Banking Representative
Select Your County Below to Get Started
PROGRAM GUIDE
QUESTIONS
Connect directly with your area’s NJEDA Business Banking Representative
Select Your County Below to Get Started
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.