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The total number of small businesses in New Jersey is a whopping 820,303. Small businesses employ just over half of the private workforce in the state, and also account for 92.1 percent of the region’s exports, according to the U.S. Small Business Administration (SBA).
In order to nurture and encourage such a crucial part of its economy, the state of New Jersey helps its small business owners a lot. They offer various resources, including general and specialized business assistance, training services, tax credits, and – most importantly – small business financing programs, too.
Let’s go over some of the small business financing options available to New Jerseyans.
On this page:
Small Business Loans in New Jersey
There are several financial institutions that provide small business loans to residents of New Jersey. With differing eligibility requirements and funding amounts, it may take some time to determine the best financing option for your business. Below are a few online companies offering small business loans in New Jersey.
As low as 6.00%
$5,000 – $2 million
1 – 5 years
The above information is for the Lendio Business Term Loan.
Lendio is the largest small business loan marketplace in the U.S. with a network of over 300+ lenders. These lenders include PayPal, Bank of America, American Express, and more.
New Jersey small business owners can apply with one simple application without impacting their credit. The application process can be completed online in 15 minutes with no fee or obligation. If approved, funds can be made available in as little as 24 hours.
- Short term loan
- Business term loan
- Business line of credit
- Merchant cash advance
- Business credit card
- Equipment financing
- Commercial mortgage
- Startup loan
- SBA loans
- Accounts receivable financing
- Business acquisition loan
9.77% – 35.98%
$5,000 – $500,000
6 – 60 months
The information above is for the LendingClub Business Term Loan.
LendingClub is a peer-to-peer lender that connects investors with businesses in need of financing. To be eligible, businesses in New Jersey must have at least $50,000 in annual sales, as well as been in business for 12 months or more.
You can apply online in under 5 minutes and receive multiple quotes. If you decide to pay off your loan early, there are no prepayment fees to worry about.
7.00% – 69.00%
$500 – $250,000
6, 12, or 18 months
The information above is for the Kabbage Business Line of Credit.
Kabbage is a small business lender offering a business line of credit. The lender has a low minimum loan amount which can make it a good option for those in need of a small amount of financing in New Jersey.
In order to be eligible, your business needs to be at least 12 months old, with $50,000 in annual revenue.
Small Business Grants in New Jersey
Just like when you are applying for financial aid when you want to go to college, there is a way to get free money to help open a small business. Unlike loans, you don’t have to pay back small business grants – but you will certainly need to put in a lot of time searching around for the right grants you may be eligible for and putting together the necessary requirements for the application.
Grants can be given to small businesses from both private organizations and federal, state, county, or local governments. Many have very specific requirements, like a certain number of employees or a particular industry.
Here are some small business grants that can be given to firms in New Jersey.
FedEx’s Small Business Grant
Shipping company FedEx offers for-profit businesses with less than 100 employees that have been in business for at least six months an opportunity to get one of its yearly grants. One winner gets $25,000; one winner gets $15,000; and eight winners get $7,500. The deadline for 2018 was in March, so start planning ahead for the year ahead. The competition is stiff – there were 7,800 applicants in 2018.
National Association of the Self Employed (NASE)
Only NASE members are allowed to apply for this grant, which is worth $4,000 and offered to a new small business every single month.
Eileen Fisher Women-Owned Business Grant Program
This clothing brand offers as many as 10 small businesses with grants of at least $10,000 every year. Revenues cannot exceed $1 million, and the companies need to be in operation for at least three years and at least 51 percent women-run organizations in order to be eligible. The deadline is end of May, annually.
There are grants that are offered by the government, but they often have very specific, niche eligibility requirements – like working in healthcare innovation, which is required for the Small Business Innovation Research (SBIR) grant.
Do a lot of research based on your own profile as a business owner – are you a minority, a veteran, or do you work in a niche industry? Try different searches and different combinations based on what type of business operator you are and what kind of firm you are running.
Small Business Investors in New Jersey
When it comes to getting funding for a small business, outside investors play a huge part in launching startups all over the world. For small businesses that have a lot of potential, wealthy investors are willing to put their own money on the line to help a venture succeed. Not all business owners will be able to impress an investor or group of investors enough to seal the deal, but it’s certainly worth a shot to check out some of the investors in your area.
Here are some different types of small business investors that fund ventures in New Jersey:
New Jersey Economic Development Authority
The NJEDA works with venture capital firms by committing tens of millions of dollars that go toward businesses in the fields of emerging technology and life sciences. Venture capital firms invest about six times the amount that NJEDA contributes, which has gone to many local startups.
JumpStart NJ Angel Network
This is a group of angel investors that works with startups across the mid-Atlantic region, and has been in operation since 2002 – when it was started with the support of New Jersey Technology Council (NJTC) and New Jersey Economic Development Authority (EDA). There are multiple angels in the organization, and they primarily invest in technology companies.
Tri State Ventures
This group of accredited investors matches its selection of high net-worth individuals with high-potential early-stage businesses – seed-stage funding. Tri State Ventures typically helps arrange investments in the range of $50,000 to $5 million in these sectors: healthcare (drugs, medical devices, diagnostics), energy, consumer products, and information technology products and services (wireless, photonics, communications).
Getting Your Business Ready for Financing
In order to make a strong case for grants, loans, or courting potential investors, it is best to be as prepared as possible before even starting to seek out these types of funding. Before you even start thinking about it, you need to ask yourself these questions:
- Is now the right time to seek financing?
- Do I have enough time to do thorough research to find the best source of financing?
- Do I know what kind of financing my small business is eligible for?
- Is my small business set up so that repaying a loan is feasible given my business plan?
If the time is right for your small business, it is extremely helpful to have these prepared:
- An in-depth business plan with realistic and well-thought-out projections for the future. The business plan needs to show potential investors, lenders, and grant providers that you know what you’re doing, you know your goals, and how your business will reach them.
- A detailed plan of how you intend on using the funds from the loan, grant, or outside investment.
- Necessary small business loan documents: business and personal tax returns, business and personal bank statements, business financial statements, and business legal documents.
Check each individual lender or investor’s requirements before reaching out and have everything ready to go. Some lenders (mostly private banks) will require some sort of collateral or minimum credit score – so do your research to make sure you even qualify.
Moreover, demonstrate that you know your stuff. It’s important to show that you take your small business’ success seriously, and that you have a clear vision of the road ahead.
What Kind of Financing Do You Need?
Small businesses in New Jersey have numerous financing options, which is why you need to take the time and ensure that you’re making the right choice for your business. The first step is to find out what free financial assistance your small business is eligible for, then submit applications for those – giving you access to free funding early on.
Remember that some grants have requirements that last long after the money has been given, so double-check that you are up for whatever commitments a small business grant requires you to make.
After sourcing as much money as you can from grants, and potentially friend and family contributions, you should then explore your loan and investor options. If your business can realistically handle paying back a loan, then check out the different small business loans available to your type of business. If your small business has enough promise to realistically attract an investor, then start getting yourself ready for investor presentations.
Interested in taking out a personal loan to bootstrap your business? Our guide to personal loans in New Jersey reviews your options.
Author: Jeff Gitlen