Report from The Front: Winning an NJEDA Microbusiness Loan

One of the most popular NJEDA small business support programs is their Main Street Micro Business Loan. A ‘microbusiness’ is one in New Jersey with ten or fewer full-time employees and no greater than $1.5 million in annual revenues, and qualifying businesses must be formed for at least six months prior to the date of loan application. 

This program is for a $50,000 loan at 2% interest with no payments for the first year, and the high likelihood of loan forgiveness after five years, allowing you to walk away with $10K-$20K in ‘free money’. And while the loan requires use only for the approved purposes noted on the application, which consist of specified operating costs, compliance with these terms is enforced only by self-reporting.

Not surprisingly, the Micro Business Loan is a very popular and competitive program. The most recent Microbusiness Loan application period lasted a little over two hours from opening before it was heavily over-subscribed and closed to further applications. Needless to say, advance preparation and organization are key to winning such a cut-throat race.

If your business qualifies for this generous loan or other State support, read on for winning application tips.

Tips for Application Success

First, thoroughly review all previous application materials in advance: Read any previous documents and forms provided, including prior-year applications. The same materials (or a slight variation) will almost certainly be used for the next application period as well. Watch any previous webinars on the program, available in both English and Spanish.

Work to your Checklist: Most NJEDA applications include a Checklist noting all the documentation and evidence you need to submit; follow this guide religiously. Triage your Checklist by identifying the requirements that demand additional time for processing, such as a certification from the state for taxes or a DBA business name. Tackle the ‘longest tail’ requirements from your Checklist first, especially any involving third parties. Fill out forms in advance and save them for later upload where possible.

Prepare ‘Documents to Upload’ folder: You must submit the supporting documentation noted in your Checklist with your application. Create a new ‘to upload’ folder so all of these documents are ready in one place to upload. Remember, the application process is a race.

IF you do not have a given document at application time, don’t give up or forego application submission entirely–submit a ‘placeholder’ related, supporting document instead. For example, submit an original, unapproved application if you’re still waiting for a State-approved version. Then, if your application makes it in on time and through the initial vetting, you’ll get the chance to upload the ‘real’ document later. The NJEDA works with first-round applicants on addressing any gaps or discrepancies in their application, such as disallowed expenditures or draft-phase documents.

Prep your heroic / heartstrings tale: There’s a section in the application for you to indicate whether you’re a member of any ‘protected class’, including but not limited to minorities and the handicapped. While the NJEDA claims to not take this information into application consideration, it’s there for a reason. And anecdotal evidence indicates this section does carry some weight in the approval process. Don’t lie, but any stories of personal trials, adversities, or burdens should be included here in addition to or in place of details on any ‘protected class’ membership you may qualify for.

Have internet contingency plans (for internet/power): Create a contingency plan in case your internet connection dies or slows prohibitively the morning the application period opens, whether it’s going to a public hotspot, the library, or a neighbor’s. Have a copy of your ‘to upload’ folder on a USB thumb-drive or on Google Drive for remote access IF necessary.

Day-of: Better eat your Wheaties: The application requires at least 4-8 weeks of advance preparation and 1-2 hours to apply online. Turn off your phone and have your coffee ready for the 1-2 hours of focused effort you’ll need to apply for the loan.

The Long Wait: You can expect a response to your application 5-7 months after submitting it. If approved, you’ll probably get your money 3-4 months later, or some 8-11 months total after originally applying for it.

Your next chance: A new Main Street Micro Business Loan application period is expected this Spring 2024. The NJEDA will announce the actual date at least 2-3 months in advance. This popular program has been running since 2019 (originally under a different name) and is forecast to be continued for the near future.

LINKS

–Micro Business Loan Overview: https://www.njeda.gov/microbusinessloan/ 

–Program FAQs: https://www.njeda.gov/wp-content/uploads/2021/12/MBL-FAQ-10.4.22.pdf
–Checklist: https://www.njeda.gov/wp-content/uploads/2021/11/Main-Street-MBL-applicant-checklist-FINAL-9.14.22.pdf

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