Eligible lenders can apply for a lending grant of up to $1 million that will be used as funding for new micro business lending products or as supplemental funding for existing micro business lending products.

In order to ensure that the loans being provided to the micro businesses are flexible and meet the Authority’s expectations for this program, any loan products created by the lender and funded through this grant must meet the following specifications:

Requirements for Loan Applicants

• Must be for micro businesses that have less than 10 full time employees at the time of
• application and have less than $1.5 million in annual revenue (based on their last federal
• tax return required to be filed).

• The micro business must have a commercial location in New Jersey, which can be a home-based business.

• Loans can be used by micro businesses for equipment purchases, rolling stock, and operating expenses such as payroll, marketing, inventory, rent, mortgage/property tax payments, utilities, or any other expenses that are applicable to the daily operation of the business.

• Loans cannot be used for restructuring existing debt or financing, any construction, reconstruction, demolition, alteration, repair work, maintenance work, or construction related to installation of equipment where such activity exceeds $1,999.99.

• Home-based businesses, non-profit organizations, for-profit entities, sole proprietors, and/or startups may be eligible for loans, but home-based businesses are not permitted to use the working capital loans for rent/mortgage/property tax payments or utilities or for the purchase of equipment that attaches to the property.

• Lenders will be required to collect a current NJ Business Tax Clearance Certificate from micro business loan applicants, unless the applicant is a non-profit that is not required to register with the Division of Taxation.

• Lenders cannot provide any financial assistance to micro businesses that are engaged in any of the following: the conduct or purveyance of “adult” (i.e., pornographic, lewd, prurient, obscene or otherwise similarly disreputable) activities, services, products or materials (including nude or seminude performances or the sale of sexual aids or devices); any auction or bankruptcy or fire or “lost-our-lease” or “going-out of business” or similar sale; sales by transient merchants, Christmas tree sales or other outdoor storage; or any activity constituting a nuisance.

Required Rates, Terms and Conditions:

• The minimum credit score required of the micro business to qualify for the loan must be under 650.

• Terms of the loan to applicants can go up to a 10-year term.

• Upon loan closing, a payment moratorium period of at least 12 months must be provided to the micro businesses.

• Loan product being offered must be fully amortizing to avoid balloon payments.

• Interest rates cannot exceed 5% on each loan.

• Loan amounts must be no greater than $100,000 and no lower than $10,000.

• Must allow for a minimum Debt Service Coverage Ratio on this program of 1.0, but applicant’s personal cash flow of owners that are personal guarantors may can be considered.

• Application fees may be charged by the lender – but cannot exceed 1% of the loan amount.

• No prepayment penalty can be charged to the micro businesses.

• The decision of whether to require collateral and personal guarantees are at the discretion of the lender.

• The decision of whether to allow loan modifications are at the discretion of the lender.

Fund Management and Disbursement

• Each entity must lend and disburse 40% of the total lending grant to businesses located in Opportunity Zone eligible census tracts (as explained below).

• All grant funding must be fully used/disbursed within 3 years from grant closing date between lender and NJEDA.