Bill > S428

Introduced Session

This bill requires the New Jersey Economic Development Authority (EDA) to establish a loan program to provide businesses owned or operated by individuals with a disability with funding for operational or capital expenses, or both, to establish or continue business operations. Loan Program Qualifications The loan program provides low-interest loans to qualified businesses that demonstrate to the EDA that: 1) the qualified business is, or will become newly engaged, in a viable trade or business; 2) the qualified business employs or plans to employ at least five full-time employees during every calendar month of the 24-month period following the date of application for the loan program and at least 50 percent of the employees are New Jersey residents; and 3) the qualified business is owned or operated by an individual with a disability. Application Criteria A qualified business that seeks assistance under the loan program is required to submit an application to the EDA, in a form and manner prescribed by the EDA. In addition to any other information that the EDA may deem appropriate, the application is required to request an applicant to submit information demonstrating that the applicant meets the eligibility requirements and an outline of the anticipated use of loan proceeds. Under the bill, the EDA is required to approve applications for the loan program on a rolling basis, subject to the availability of funds. Loan Requirements In addition to any other terms and conditions that the EDA may deem appropriate, each loan issued under the loan program may include provisions for the forgiveness of the loan, in whole or in part, within two years of loan fund disbursement, if the qualified business notifies the EDA that, after a bona-fide effort, the qualified business no longer exists because the trade or business is no longer viable. This provision of the bill should not be construed to provide for compulsory loan forgiveness by the EDA, and no loan will be forgiven in the event of fraud or mismanagement of funds. Each loan issued under the program is required to: 1) be issued for a term not to exceed six years, with payments not commencing until one year after the loan's approval; 2) bear interest at rates not more than three percent for qualified businesses; and 3) provide more flexible repayment terms than are customarily made available through conventional business loans issued by private lenders. Any qualified business that receives assistance under the loan program is required to submit an annual report to the EDA until such time as the full balance of the loan has been repaid to the EDA. At a minimum, the annual report is required to include information outlining the expenses supported by the loan, describing bona fide efforts to ensure the viability of the business, and assessing the performance of the qualified business, including whether the business still exists. Loan Fund and Appropriation Finally, the bill appropriates $5 million from the General Fund to the EDA to support the operations of the loan program. These monies are to be deposited into a non-lapsing revolving loan fund which the EDA is required to administer for the purposes of the loan program. Any interest collected from loans provided by the loan program may be used by the EDA to offset the costs of the administration of the loan program, or otherwise are required to be deposited in the fund.

AI Summary

Committee Categories

Nilsa Cruz-Perez (D)*,  Joe Pennacchio (R)*,  Patrick Diegnan (D), 

Introduced in the Senate, Referred to Senate Economic Growth Committee (on 01/09/2024)

Official Document