February 11, 2022
4 minute of reading
Microlender grants will fund loans and technical assistance for smaller businesses and nonprofits
TRENTON, NJ (February 11, 2022) – The New Jersey Economic Development Authority (NJEDA) The board approved the creation of the Main Street Lenders Grant at its February meeting on Wednesday. This pilot product, funded with $15 million from the Main Street Recovery Program, will provide loan grants of up to $1 million to be used by eligible micro-business lenders to create new micro-business lending products or complement existing products.
The Main Street Lenders Grant is the third of several products launched by NJEDA under the Main Street Recovery Program. Created under Economic Recovery Act of 2020 (ERA), which was signed by Governor Phil Murphy in January 2020, the Main Street Recovery Program is a $100 million small business support program that will fund several financial relief products aimed at supporting the growth and success of small businesses. New Jersey companies. More information is available at https://www.njeda.com/main-street-recovery-fund/.
New Jersey-based Community Development Financial Institutions (CDFIs) serving New Jersey micro and small businesses, minority deposit-taking institutions (MDIs), and other qualifying lenders, as defined in the ERA, will be eligible for apply for the grant from main street lenders.
In keeping with Governor Murphy’s Equity Pledge, each approved entity must lend and disburse at least 40% of the Main Street Lenders’ Grant funding to businesses and nonprofits in census tracts eligible for the Opportunity Zone.
“Even before COVID-19, businesses in underserved communities faced challenges accessing capital, and NJEDA’s lending partners have long helped ensure that microenterprises, nonprofits, and other small businesses have access to the capital they need,” the NJEDA chief executive said. Tim Sullivan. “Their role is more vital than ever as businesses continue their recovery from the pandemic. The Main Street Lenders Grant is a vital part of the comprehensive and intentional suite of small business solutions created by the Legislature and rolled out as part of the ERA under Governor Murphy’s leadership.
The Main Street Lenders Grant will offer two types of grants to eligible entities. The first is a loan subsidy. This grant of up to $1 million will be used as funding for new micro business loan products or as additional funding for existing micro business loan products.
Recognizing that micro-enterprises not only need funding, but may also need assistance in applying and qualifying for such funding, the second type of grant that will be made available through this product is a grant technical assistance. This grant will support eligible entities with the costs associated with providing technical assistance to micro-enterprises to best prepare and position these micro-enterprises to qualify for micro-enterprise loans. The maximum technical assistance grant an eligible entity can receive is 50% of its loan grant amount (not to exceed $500,000). Only lenders who receive a loan grant are eligible for the technical assistance grant. The intention is that these grants allow lenders to provide micro-enterprises with technical assistance and then offer a loan product to the micro-enterprise at the end of the technical assistance.
“NJEDA is working with its lending partners to improve access to capital for smaller businesses, which often struggle to obtain the funds they need to build resilience and position themselves for growth,” said Christina Fuentes. , NJEDA’s Executive Director of Community Development. “As we emerge from the pandemic, this grant will expand NJEDA’s reach by expanding the ability of its lending partners to support more micro-enterprises by removing barriers to accessing capital.”
Any lender applying for the loan grant must have 10 years of demonstrated experience serving small and micro enterprises, and any entity applying for the technical assistance grant must demonstrate two years of experience providing assistance support to micro-enterprises – either directly or in collaboration with a technical assistance partner.
Among other requirements, products created by eligible entities using the Main Street Lender Grant must provide loans of $10,000 to $100,000 to micro-businesses that have fewer than 10 full-time employees and less than 1, $5 million in annual revenue at time of application. The business must also have a business location in New Jersey, which can be a home-based business. Home-based businesses, nonprofits, for-profit entities, sole proprietors, and/or startups may be eligible to participate in the program which will be funded by the Main Street Lenders Grant. Full eligibility requirements for the loan products that will be offered can be viewed at https://www.njeda.com/financing-and-incentives/.
The Main Street Lenders Grant complements the direct funding provided under the Main Street Restoration Program through the recently launched program Small Business Lease Grant and Small Business Improvement Grant.
Signed in January 2021, the ERA creates a suite of programs including tax credits to encourage job creation, new construction and the revitalization of brownfields and historic properties; financial resources for small businesses; support for new healthy food supermarkets and retailers in food desert communities; new funding opportunities for start-ups in New Jersey; and supporting the growing film and digital media industry.
About the New Jersey Economic Development Authority
The New Jersey Economic Development Authority (NJEDA) is the state’s primary agency responsible for stimulating economic growth. NJEDA is committed to making New Jersey a national model for inclusive and sustainable economic development by focusing on key strategies to help build strong and vibrant communities, create good jobs for New Jersey residents, and pave the way for a stronger and fairer economy. Through partnerships with a wide range of stakeholders, NJEDA creates and implements initiatives to improve the economic vitality and quality of life in the state and strengthen New Jersey’s long-term economic competitiveness.