NJ Entrepreneur Support Program provides guarantees to support investments into Garden State companies
TRENTON, N.J. (February 5, 2024) – The New Jersey Economic Development Authority (NJEDA) continues to accept applications for the New Jersey Entrepreneur Support Program, which was launched in 2020 to help Garden State entrepreneurs navigate COVID-19 related cashflow constraints, then relaunched in March of 2023 in light of challenges in the economy and venture banking system. The $5 million program encourages investors to provide additional funding to businesses by providing an NJEDA guarantee on loans advanced for working capital purposes.
According to estimates from PitchBook, venture capital and angel investment activity has declined since 2021, with a 40 percent reduction in the amount of companies receiving investment and a 50 percent decrease in investment funding. To respond to declining investment activity and unsteady market conditions, especially in the life sciences sector, the NJEDA aims to boost investor confidence in New Jersey companies and increase access to capital for founders through the Entrepreneur Support Program.
“Increased investment into New Jersey companies is essential to supporting Governor Phil Murphy’s vision of bolstering the Garden State’s longstanding leadership in innovation,” said NJEDA Chief Executive Officer Tim Sullivan. “Especially in industries like biotechnology, the New Jersey Entrepreneur Support Program provides a unique solution to assist New Jersey companies in their financing endeavors when opportunities for private investment are not available.”
The NJ Entrepreneur Support Program provides investors with a one-year guarantee of up to 80 percent on a convertible note or bridge loan to a qualifying company. Multiple notes or loans to a qualified company can receive guarantees up to a maximum of $400,000 per company. To qualify for the program, a company must have an office located in New Jersey with a minimum of 50 percent of employees located in the state, have fewer than 225 employees, and be a part of at least one NJEDA targeted industry. For a full list of targeted industries, click here. Qualified investors under the program must be independent from the company, and the proposed investment must not mature for at least one year, cannot require payment for at least a year, and must be unsecured.
For a full list of eligibility requirements and further information on the program, visit https://www.njeda.gov/njesp/.
Release Courtesy of the NJEDA