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(TRENTON) – Legislation Assembly Democrats Daniel R. Benson, Albert Coutinho, Troy Singleton and Wayne DeAngelo sponsored to promote small business expansion to create jobs and economic development was signed into law on Tuesday.
The law (A-4336 from the 2010-11 legislative session) builds upon previous Democratic job creation efforts and creates a loan program within the New Jersey Economic Development Authority to help small businesses expand.
“We cannot rest easy when unemployment continues to hover above 9 percent,” said Benson (D-Mercer/Middlesex. “We need to do more, and this law aims to ensure New Jersey businesses are as competitive as possible so they can thrive and create new jobs. Strengthening our economy to ensure residents can find work is a priority.”
“Nothing is more important right now than doing whatever we can to help New Jerseyans and the businesses that employ them survive this difficult economy,” said Coutinho (D-Essex), chairman of the Assembly Commerce and Economic Development Committee. “Creating jobs and economic growth is a must, and with this we’re positioning New Jersey businesses to succeed in the 21st century. That can only be a good thing for our residents.”
“I promised to make job creation and economic growth top priorities, and this is a great step toward making that goal reality,” Singleton said. “Making it easier for small businesses to expand and taking steps to ensure our businesses remain competitive will lead to more jobs for working class families striving to make ends meet. That will mean a stronger New Jersey for everyone.”
“Small businesses are the lifeblood of this state, and we need to do everything we can to help them expand, invest and hire residents,” said DeAngelo (D-Mercer/Middlesex). “Working families in New Jersey benefit when small business thrive. That’s why this law is so vital.”
The law requires the EDA to establish a small business loan program offering low interest loans of up to $250,000 to eligible small businesses for purposes that increase total employment. Generally, the interest rate on the loans would be 2 percent. If the loan results in a greater increase in employment or the target increase is met more quickly, the authority could allow the rate to fall below 2 percent if the business commits to increasing its full-time employment level:
· by more than 10 percent, or more than one full-time employee for businesses employing less than 10 full-time employees at the time of application, or
· by no less than 10 percent, or one full-time employee, as appropriate, in less than four calendar years after the date on which the loan funds are disbursed to the business, or
· a combination thereof.
The rate of interest corresponds appropriately to the percentage of full-time employment increase or the decrease in time to increase employment, or a combination of both, to which the business commits. A participating business in default for nonperformance may be required to refund the outstanding balance of small business loans disbursed prior to the default declaration. A small business loan is secured by a first lien on the receivables of the business entity receiving the loan.
An eligible small business will be considered an entity that, at the time of application for participation in the small business loan program:
· is independently owned and operated;
· is organized for profit with a place of business located in this state;
· operates primarily within this state;
· has less than 100 full-time employees;
· is not dominant in its field;
· has not raised $10,000,000 or more in total equity financing; and
· has not received $10,000,000 or more in financing from any source.