The New Jersey Economic Development Authority is currently accepting written comments on the rules for the new $100 million Main Street Recovery Finance Program that will provide grants, loans and technical assistance to small and microbusinesses in New Jersey.
NJBIA Vice President of Government Affairs Christopher Emigholz said it’s a good opportunity for businesses to weigh in before the July 21 deadline.
“NJBIA supported the creation of this new program focused on small businesses as part of the larger Economic Recovery Act of 2020,” Emigholz said. “Prior iterations of our tax incentive laws did not focus enough on supporting small businesses, so it’s important that this program is accessible as possible to those who can benefit from it.”
These initial rules establish two new NJEDA product offerings:
- A Small Business Lease Grant providing grant funding to offset a portion of lease payments for businesses leasing new or additional space;
- A Small Business Improvement Grant reimbursing business owners for costs associated with making interior or exterior building improvements or purchasing/installing furniture, fixtures or equipment.
“Fortunately, eligibility for these programs is broader than previous EDA grant programs,” Emigholz added. “Small businesses are now being defined as meeting the US Small Business Administration’s definition per NAICS code, which is not nearly as small as the previous caps of 10 or 20 employees.
“Also, previous NJEDA programs were for small businesses that had been open for a certain time, while this program does not seem to have that limit. This was an improvement that NJBIA advocated for to support new businesses, especially ones filling the far too many empty Main Street storefronts.”
Emigholz, however, noted the Main Street Recovery Program is a little stricter that previous NJEDA grant programs because the applying small business cannot have employees making less than $15 per hour, or 120% of the minimum wage.
“NJBIA opposed this provision in the law that created this program as too limiting for businesses that may for example have just one teenage seasonal worker making the $12 minimum wage,” he said. “But the NJEDA has no flexibility here as this is in state statute.”
Emigholz also noted some other important provisions about the program:
- There is a $100 application fee for both programs.
- 40% of both grant programs will be set aside for businesses in federally designated Opportunity Zones.
- The Lease Grant program will provide funding for new, amended or extended leases for 500-10,000 square feet of space. Space over 10,000 square feet is still eligible but won’t get funding for more than 10,000.
- The Improvement Grant program will provide funding for up to half of an improvement project with grants ranging from $2,500 to $50,000.
- Improvements grants less than $25,000 must remain in the facility for at least two years, while grants over $25,000 must remain for at least four years and use green building standards.
- The NJEDA also plans to introduce programs for microbusiness loans and support for microbusiness lenders in the future. Fortunately, the definition of microbusiness was expanded in the recent tax incentive cleanup law that NJBIA supported.
Preliminary program rules can be found here.