New Jersey Small Business Loans

New Jersey is a state that values small businesses and economic growth. Nearly half of the state’s workforce (1.9 million New Jersey residents) is employed by small business owners. In fact, the total reported new lending to businesses in amounts of $1 million or less reached approximately $8.4 billion in 2019, with the rate of lending via small business loans slowly rising since 2010.

Small businesses help their local communities by providing new jobs, keeping currency in circulation, revitalizing blighted neighborhoods, encouraging innovation, and driving economic growth and development.

We’ve compiled a quick guide for business owners in the state of New Jersey to learn more about small business loans and other forms of financing available to help you grow your New Jersey business.

How a loan can help your small business in New Jersey

There are several ways that a small business loan can be used to help your New Jersey business.

Small business loans help entrepreneurs gain access to the money they need to finance emergencies and other large expenses or investments without the need to have cash up front.

Some of the most popular reasons for taking out a small business loan include to cover start-up costs, new equipment purchases, real estate transactions, staffing needs, and working capital needed to pay for day-to-day operating expenses. Small business loans can help your business achieve its goals while keeping cash flow healthy. When managed properly, a small business loan can absolutely help your small business in New Jersey.

Types of small business financing options in New Jersey

Business owners in the state of New Jersey have several different small business financing options to consider. Here are a few options to consider:

• Term Loans: As the most common type of business loans, a business term loan in its most basic form is simply a type of installment loan used for business expenses. Installment loans allow borrowers to repay a lump sum of cash with a set repayment period and fixed monthly payment. Interest rates may be fixed or variable, so make sure you understand the pros and cons of each option. Term loans typically come with no spending restrictions, thus making them a top choice.
• SBA Loans: The Small Business Administration (SBA) offers a variety of loan programs including microloans, real estate loans, and equipment loans. The SBA guarantees loans through a network of partner banks, resulting in low interest rates and more lenient application requirements. SBA loans offer an alternative to traditional business term loans, so if you have been turned down for a loan from other sources, consider applying for an SBA loan. The downside to SBA-backed loans is that approval can take much longer than any other source of financing, and in some cases can take a few months.
• Online Business Loans: Online business loans offer some of the best deals on business financing because these lenders usually operate with fewer overhead costs. Consumers can benefit from the cost savings in the form of lower interest rates, more flexible underwriting terms, and fast loan approval. The underwriting process with these lenders is fairly quick and easy, with access to funds usually taking just a few business days. Online loans are becoming very popular with business owners for this reason. In addition, it’s easier to explore loan offers online. At PrimeRates you can check personalized offers online within minutes with no credit impact.
• Commercial Business Loans: Commercial business loans cover large commercial expenses via financing. Business owners can use these loans to cover purchases such as vehicles for commercial use, commercial equipment, commercial real estate, and commercial construction costs. Banks, credit unions, and online lenders are all sources of commercial business loans.
• Business Credit Card & Lines of Credit: Some business owners prefer using credit instead of taking out a loan. A business credit card or line of credit can function as an ongoing source of revolving credit perfect for covering emergencies or day-to-day operating expenses. Credit cards offer some advantages over business loans including quick approval times, a simpler application process, and the potential for a lower interest rate if you find a good deal or promotion.

Small business financing resources in New Jersey

The U.S. Small Business Administration (SBA) is a good starting point for businesses in any state to access resources and information about financing options including loans, investment capital, disaster assistance, surety bonds, and grants. SBA-backed loans are a popular option for many entrepreneurs.

In addition, business owners in New Jersey can take advantage of the following resources:

• The New Jersey Small Business Development Center provides a variety of training programs and resources to new and existing businesses in the state of New Jersey. A team of consultants is available to help educate and advise business owners. The New Jersey SBDC also publishes a comprehensive guide called "How To Start A Business In The State Of New Jersey” - available free with any Business Start-Up Workshop.
• The New Jersey Business Action Center also publishes a Guide to Doing Business in New Jersey available for free online. Other resources include podcasts, publications, and webinars as well as a team of Small Business Advocates that provides mentorship and referrals. The center also maintains a page of financial resources including grants, tax credits, and other financial options.
• The New Jersey Economic Development Authority (EDA) is an independent state agency that exists to help business owners with expansion opportunities and job creation. Resources include training programs, financial assistance (bonds, loans, and tax incentives) to qualified businesses, and business incentive grant programs.
• Another option for small businesses is to find a Community Development Financial Institution (CDFI). These non-profit lenders offer favorable terms and low interest rates as well as mentoring and workshops. CDFIs focus on lending to small businesses, entrepreneurs, nonprofit organizations, and more. Some non-profit lenders in New Jersey include: Cooperative Business Assistance Corporation (CBAC) and Greater Newark Enterprises Corporation (GNEC). You can also find a CDFI near you using this online locator.
• The state of New Jersey operates an interactive business portal that offers information on financial programs including The New Jersey Angel Investor Tax Credit Program, the Aspire gap financing tool, and others.
• The state of New Jersey also publishes a convenient checklist for starting a new business in the state including convenient links to everything a business owner needs to know.
• Female-owned businesses in the state may benefit from the information available through the New Jersey Women’s Center for Entrepreneurship (WCEC). As an SBA Resource Partner, WCEC can help you learn more about funding your business, including PPP, EIDL, NJEDA grants & loans.
• Similarly, the Latin American Economic Development Association (LAEDA) is a non-profit economic development organization that offers consultations, training programs, community initiatives, and other resources to local Latin American-owned businesses. LAEDA assists small businesses throughout Camden, Burlington, Gloucester, Atlantic and Cumberland counties. They also run the LAEDA Women's Business Center for Latina business owners.
  

Small business grants available in New Jersey

As opposed to loans, grants are gifts of financial assistance that do not need to be paid back. Small business grants are offered to business owners to help them succeed and to benefit the local economy.

Many grant programs today are designed to help specialized sectors of the economy, such as initiatives encouraging rural development or revitalizing blighted areas.

Small business grants are most often offered through government agencies, large corporations, and non-profit community organizations.

Entrepreneurs in the state of New Jersey have several options when searching for a small business grant:

• The State Trade Expansion Program (STEP) Grant provides grants in amounts up to $15,000 to small businesses seeking to expand through international business development activities (such as attending trade shows or updating marketing materials for an international audience).
• The New Jersey Economic Development Authority (NJEDA) offers a variety of grant programs including the Small Business Improvement Grant Program and the Small Business Lease Grant Program.
• Business owners can also check the portal at New Jersey Grant Watch for grant opportunities.

In addition to the resources above, business owners can also check state agencies such as the New Jersey Department of Education and New Jersey Department of Transportation for grants.

Federal agencies that offer grants to small business owners include the SBA and USDA. Lastly, grants may be available at the municipal or county level as well, depending on the local area in which you live.

Tips for applying for a small business loan in New Jersey

When applying for a small business loan in the state of New Jersey, business owners should keep the following tips in mind:

• Consider your credit: When you’re applying for any type of loan, it’s especially important to make sure your credit score is up to par. Lenders will take a look at your personal and/or your business credit report to make sure you are a qualified applicant for a loan. Financial institutions generally want to see scores of 660 and above to grant applicants access to the best loan offers and the lowest interest rates. However, even if your credit is less than ideal, you can still take steps to fix it before applying or consider using a cosigner for your loan. You can access a free copy of your credit report once a year from one of the three major credit bureaus. We recommend checking your credit score before applying for a loan.
• Prepare a business plan: One of the most commonly requested items from business loan lenders is a business plan. Most lenders will require a comprehensive business plan and other financial documentation when considering your application for a loan. A business plan should have several key elements including an executive summary, a marketing plan, a financial plan, and an operations plan. Having a business plan will not only help you qualify for a loan but will also help you succeed in your endeavors.
• Gather your paperwork: In addition to a business plan, lenders will most likely request additional paperwork to support your business loan application. You should gather all of this documentation before starting your application in order to best streamline the process. Be prepared to show legal proof of your business, the length of time you have been in business, your current revenue, and other financial information such as projected earnings, tax returns, and bank statements. Some lenders require a minimum amount of time in business (usually 1-2 years) and/or a minimum annual revenue amount that they require of loan applicants.
• Consider alternative lenders: Besides your local bank, there are many other sources of business financing. Credit unions and online lenders may be able to offer you a better deal on a business loan than the big name bank down the street. These alternative lenders typically have some of the lowest interest rates and most flexible loan terms. Membership in a credit union is based on the place of your residency, employment, or education, so be sure to check with credit unions near you to find out their membership requirements. The most popular credit unions in the state of New Jersey include Financial Resources Federal Credit Union, NJ Gateway Federal Credit Union, Thunderbolt Area Federal Credit Union, Riegel Federal Credit Union, Jersey Shore Federal Credit Union, Healthcare Employees Federal Credit Union, First Atlantic Federal Credit Union, Anheuser-Busch Employees' Credit Union, State Farm Federal Credit Union, and Navy Federal Credit Union.
  

Wrapping up

Small businesses are a reflection of an individual’s passion. Owning a small business can be so rewarding, but at times it may feel impossible to keep going. With small businesses providing jobs, attracting tourists, and contributing to the local economy, there are plenty of resources available in New Jersey. These resources can help your business grow and thrive. 

Business loans are frequently used by small businesses to help them reach the next level. Whether you need to replenish cash flow or invest in growth, business loans can be a valuable resource to help you defy the impossible. Before taking out a business loan though, you should explore the options available and compare rates. As a business owner it’s important to save when you can.

Compare rates and get funded

To compare rates and get the best deal on your New Jersey small business loan, check personalized offers at PrimeRates. By submitting one application, you can receive offers that your business actually qualifies for - without impacting your credit score. PrimeRates is committed to helping businesses thrive with a little help from our powerful network of lending partners. 

Unlock the best business loan offers in New Jersey. . . check offers online today!