One of the biggest challenges facing small businesses is the ability to borrow money needed to operate, or to grow and expand their business. Yet New Jersey is one of the best states in the nation when it comes to access to capital.
Consider that the annual CNBC network’s America’s Top States for Business study ranks New Jersey the fifth best state in the nation when it comes to access to capital (its overall ranking is 34th).
This is an important advantage because small businesses often struggle getting the capital they need. A survey by Babson College showed that business owners typically receive less than half of the amounts they request. “Respondents apply for a median amount of $100,000 and receive a median amount of $40,500,” the survey said.
One of the reasons New Jersey does so well is the bridge the NJ Economic Development Authority provides between businesses and private lenders.
EDA partners with “Premier Lender” banks, which are private sector institutions, to remove some of the financial obstacles that often prevent small businesses from getting loans. The banks provide low-cost financing and a quick turnaround, and in return, they get EDA loan participation and/or guarantees, which reduce their risk.