Bill Text: NJ S1341 | 2024-2025 | Regular Session | Introduced
Bill Title: Requires EDA to provide loans through small business loan program at lower interest rates, with more flexible repayment terms if issued to small businesses owned or controlled by certain veterans, and prohibit certain fees.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced) 2024-01-09 - Introduced in the Senate, Referred to Senate Economic Growth Committee [S1341 Detail]
Download: New_Jersey-2024-S1341-Introduced.html
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Senator MICHAEL L. TESTA, JR.
District 1 (Atlantic, Cape May and Cumberland)
SYNOPSIS
Requires EDA to provide loans through small business loan program at lower interest rates, with more flexible repayment terms if issued to small businesses owned or controlled by certain veterans, and prohibit certain fees.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning the New Jersey Economic Development Authority's issuance of loans to certain veteran-owned small businesses through a small business loan program, and amending P.L.2011, c.201 (C.34:1B-241.3).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 2 of P.L.2011, c.201 (C.34:1B-241.2) is amended to read as follows
2. a. The authority shall maintain and administer a small business loan program for the purpose of providing loans to eligible small businesses. The authority shall consult with the department in administering the small business loan program as it applies to: (1) an eligible small business that is an eligible farming operation; (2) defining the types of dairy products that shall be considered as value-added dairy products under the small business loan program, not inconsistent with section 1 of P.L.2019, c.240 (C.34:1B-241.1); (3) developing small business loan program guidelines for qualified dairy farmers and eligible farming operations; and (4) developing materials to provide to qualified dairy farmers seeking to expand value-added dairy production in this State.
b. (1) Loans made through the small business loan program may be made to an eligible small business. The loan funds may be applied to any aspect of the eligible small business that supports its capital purchases, employee training, and salaries for new positions as determined by the authority.
(2) Notwithstanding paragraph (1) of subsection b. of this section, loans made by the authority to an eligible farming operation may only be applied to aspects of the eligible farming operation that support the farming operation's farm equipment purchases, as determined by the authority. Farm equipment purchased from loan funds made pursuant to P.L.2019, c.240 shall be used by all of the business entities in the eligible farming operation.
(3) Two or more business entities engaged in farming operations in the State seeking to participate in the loan program established pursuant to subsection a. of this section shall submit a joint application in a form as the authority shall require and shall include information as the authority determines is necessary in consideration of a loan authorized pursuant to P.L.2019, c.240.
c. (1) In order to receive a loan pursuant to the small business loan program, a business, at the time of application, shall provide proof that it is an eligible small business and shall enter into a small business loan agreement with the authority.
(2) In order to receive a loan from the authority pursuant to P.L.2019, c.240, a business entity engaged in farming operations in the State, at the time of application, shall provide proof, in a manner determined by the authority, that it and at least one other business entity meet the requirements to be an eligible farming operation, including, but not limited to, proof that each business entity is engaged in farming operations in the State and will use the farm equipment purchased with the loan funds.
d. The authority shall review and may approve applications for the small business loan program.
e. A business seeking to participate in the small business loan program shall submit an application in a form as the authority shall require. The application shall include information the authority shall determine is necessary in consideration of the provisions of P.L.2011, c.123 (C.52:14B-21.1 et seq.).
f. Loans to an eligible small business under this section shall:
(1) be made pursuant to a small business loan agreement made pursuant to subsection c. of this section;
(2) bear interest at rates and terms deemed appropriate by the authority; and
(3) contain other terms and conditions considered appropriate by the authority that are consistent with the purposes of P.L.2011, c.201 (C.34:1B-241.1 et seq.) and with rules and regulations adopted by the authority pursuant to section 3 of P.L.2011, c.201 (C.34:1B-241.3).
The provisions of a loan agreement with an eligible farming operation shall include, but need not be limited to, a statement of an eligible farming operation's proportional shares of ownership, its farm equipment usage and maintenance responsibilities, and its loan repayment responsibilities for any loan proceeds received under the loan program.
g. The authority may, in its discretion, require an eligible small business that receives a loan under the small business loan program administered pursuant to P.L.2011, c.201 (C.34:1B-241.1 et seq.) to submit an audited financial statement to the authority in order to ensure the business's continued vitality. An audited financial statement from an eligible farming operation shall include each business entity in the eligible farming operation using the farm equipment.
h. The authority may, either through the adoption of rules and regulations, or through the terms of the small business loan agreement made pursuant to subsection c. of this section, establish terms governing the incidence of default by a recipient of a loan under the small business loan program, administered pursuant to P.L.2011, c.201 (C.34:1B-241.1 et seq.).
i. In determining whether to provide a loan to an eligible small business, the authority shall consider, along with other criteria that the authority in its discretion deems appropriate, whether the business commits to increasing its full-time employment level in the State.
j. (1) Notwithstanding the provisions of this section to the contrary, the authority shall, to the greatest extent practicable, administer the small business loan program in a manner to provide small business loans to eligible veteran-owned small businesses at lower interest rates and with more flexible repayment terms than are made available by the authority to other eligible small businesses. An eligible veteran-owned small business shall qualify for more favorable interest rates and repayment terms if more than 50 percent of the individuals employed by the eligible veteran-owned small business are veterans.
(2) A small business loan shall bear interest of not more than zero percent per year if the loan is issued to an eligible veteran-owned small business that is owned or controlled by one or more veterans who have been declared by the United States Department of Veterans Affairs or the United States Department of Defense as having a service-connected disability.
(3) The authority shall not charge a fee for the issuance of a small business loan to an eligible veteran-owned small business, including, but not limited to, application, commitment, closing, and guarantee fees.
(4) As used in this subsection:
"Veteran" means any resident of this State who has been honorably discharged or released under honorable circumstances from active service in any branch of the Armed Forces of the United States.
"Veteran-owned small business" means a small business that is owned or controlled by one or more veterans.
(cf: P.L.2019, c.240, s.2)
2. This act shall take effect immediately.
STATEMENT
This bill requires the New Jersey Economic Development Authority, to the greatest extent practicable, to administer an existing small business loan program in a manner to provide small business loans to eligible veteran-owned small businesses at lower interest rates and with more flexible repayment terms than are made available by the authority to other eligible small businesses. An eligible veteran-owned small business can qualify for more favorable interest rates and repayment terms if more than 50 percent of the individuals employed by the eligible veteran-owned small business are veterans. The interest rate for a small business loan issued to an eligible veteran-owned small business that is owned or controlled by one or more veterans who have been declared by the United States Department of Veterans Affairs or the United States Department of Defense as having a service-connected disability would be zero percent. The authority is not allowed to charge fees for the issuance of a small business loan to an eligible veteran-owned small business, including, but not limited to, application, commitment, closing, and guarantee fees.
