Bill Text: NJ S4094 | 2018-2019 | 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 - Dead) 2019-09-10 - Introduced in the Senate, Referred to Senate Economic Growth Committee [S4094 Detail]
Download: New_Jersey-2018-S4094-Introduced.html
Sponsored by:
Senator THOMAS H. KEAN, JR.
District 21 (Morris, Somerset and Union)
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
As introduced.
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 small business loans to eligible small businesses.
b. Small business loans may be made to an eligible small business. The loan funds may be applied to any aspect of the business that supports its capital purchases, employee training, and salaries for new positions as determined by the authority.
c. In order to receive a small business loan, 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.
d. The authority shall review and may approve applications for the loan program.
e. A business seeking to participate in the small business loan program shall submit an application in such form as the authority shall require. Such application shall include such information as 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. Small business loans under this section shall be made pursuant to a small business loan agreement made pursuant to subsection c. of this section and shall bear interest at rates and terms deemed appropriate by the authority, and 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 promulgated by the authority to implement P.L.2011, c.201.
g. The authority may, in its discretion, require an eligible small business that receives a small business loan under the 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.
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 an eligible small business that receives a small business loan under the 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.2011, c.201, 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.
