September 28, 2022 By Suzanne Robertson

New Jersey, or more commonly known as “The Garden State”, is more than just a commuter state. It’s famous for beautiful beaches, fun boardwalks, and music legacies with greats like Bruce Springsteen, Bon Jovi, and Frank Sinatra all coming from the state.

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According to SBA’s Office of Advocacy, New Jersey has 937,436 small businesses which make up 99.6 percent of the state's businesses.

If you’re starting to build an enterprise in New Jersey, you are in luck! The city is a desirable place to build your business and market towards millions of people. If you’re ready to take a leap towards your company's growth, here's what you need to know about getting the low-cost funds you deserve to grow your business in New Jersey.

Why should a small business in New Jersey seek funding?

The old adage, “it takes money to make money” holds true when it comes to small businesses. A low-cost loan can provide valuable working capital and can be used for a variety of business-building initiatives. Although the use of funds may differ from lender to lender, generally business owners can use proceeds for working capital, purchasing inventory, marketing, hiring or paying off high interest debt. Our blog post outlines all the ways a loan, one with low rates and long terms, can help strengthen your business: The Benefits of Long-Term Debt for Your Small Business.

Financing options for established New Jersey small businesses

If you need funds for inventory, working capital, hiring or more, there are lots of options. Some are fast, others take more time, some are costly and others offer low-cost funds.

So where do you turn for funding that fits your unique business needs? Below are options available in New Jersey for small businesses in need of capital.

SBA Loans in New Jersey

If you qualify, the Small Business Administration’s low-cost loan programs might be your best option. SBA loans have low rates, long terms and very low payments to fuel stability, growth and savings. There are three types of SBA loan programs available for business owners: the 7(a) Loan Program, the CDC/504 Loan Program and the Microloan Program.

The 7(a) Loan Program

An SBA 7(a) loan can be used for a variety of purposes.

  • Working Capital – Purchase equipment, increase inventory, add marketing programs, for operating expenses to hire additional staff.
  • Debt Consolidation Loans – Refinance merchant cash advances, short-term business loans, high interest business loans, daily or weekly payment loans or business credit cards.
  • Commercial Real Estate – Refinance an existing commercial real estate mortgage, buy an office building or other owner-occupied commercial space.

2) The 504 Loan Program

This program was created to give small businesses low cost funds for expansion or modernization. Typically, up to 50% of project costs are funded by a lender backed by the SBA. CDCs (Community Development Corporations) usually fund up to 40% of the project cost. The final 10% is a cash down payment expected to come from the small business owner.

A 504 SBA loan might be a good fit for small business owners interested in purchasing a commercial real estate property and if their unique business circumstances fit with the public policy goals of your local CDC. Find a CDC in New Jersey here.

3) The Microloan Program

The Microloan Program is for very small businesses, including start-ups and provides loans of up to $50,000. Requirements to qualify for a microloan can vary depending on the lender. Proceeds from an SBA Microloan can be used for most business expenses but not for paying down debt or real estate purchases.

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Why SBA 7(a) loans are the best option for small businesses in New Jersey

SBA 7(a) loans are known as the “gold standard” in small business funding because of low rates, a 10-year term and a broad use of proceeds. An SBA 7(a) loan has several advantages compared to other options including:

  • Low interest rates
  • Long terms
  • Very low monthly payments
  • Available for many uses
  • Can help build business credit
  • No prepayment penalty
  • Available nationwide

For in-depth information about the popular SBA 7(a) loan program, visit the SmartBiz® Small Business Blog and review our comprehensive article: What is an SBA Loan?

Requirements to apply for an SBA 7(a) loan in New Jersey

Lenders and loan programs have unique eligibility requirements for an SBA loan. For example, some lenders may require a business plan while others do not. (SmartBiz does not require a business plan). Requirements for an SBA loan facilitated by SmartBiz include:

  • Time in business must be above 2 years
  • Business owner's personal credit score must be above 650
  • Business must be U.S. based and owned by US citizen or lawful permanent resident who is at least 21-years old
  • No outstanding tax liens
  • No bankruptcies or foreclosures in the past 3 years
  • No recent charge-offs or settlements
  • Current on government-related loans

How to apply for an SBA 7(a) loan in New Jersey

Step 1: Check your eligibility. Before you even begin your application, make sure your business is eligible. Visit the SBA website for a list of eligible businesses. You must also meet the requirements listed above.

Step 2: Review requirements and gather paperwork. The more organized you are, the swifter the application process will move. For a list of documents required for an SBA loan, visit the SmartBiz Blog. How to Get an SBA Loan: Documents You Need.

Step 3: Choose a lender. SmartBiz Loans is not a lender, we work with multiple banks to match you with the lender most likely to fund. You won’t waste time going from bank to bank. When you work with SmartBiz Loans, expert support is available. The SmartBiz team is on hand to help facilitate the process. Our loan consultants can answer questions that might come up during the loan process.

Discover if you’re pre-qualified for a low-cost SBA loan in minutes without impacting your credit score here.*

Other financing from SmartBiz

If an SBA loan or a Bank Term loan are not a fit for your business at this time, the SmartBiz team of financial professionals can guide you as you explore other options. Additional funding opportunities facilitated by SmartBiz include:

Bank Term loans

A Bank Term loan from lenders in the SmartBiz network is a short-term, fixed-rate loan with stable monthly payments. These loans are a great fit when you need funds quickly and want to lock in your interest rate.

Proceeds from a Bank term loan can be used in a variety of ways to meet your business goals. Funds can be used for working capital, debt refinance, new equipment purchase, and more. Additionally, paying off a Bank Term loan responsibly helps to build business credit.

Business line of credit

If you’re in need of access to money “on demand”, you may want to consider a business line of credit. Here’s some information to consider regarding this flexible funding option: Business Line of Credit Pros and Cons.

Invoice financing

Invoice financing is not a loan in the traditional sense. Instead, you sell your customer invoices to a factoring company in exchange for a specified sum. They take care of collecting the payments, which means you can receive funds more quickly.

Business credit cards

Getting a credit card can be a flexible option when it comes to financing your small business if used correctly. Because they are a revolving line of credit, you can continue borrowing without depleting your available funds. In addition, they offer discounts and rewards for spending. With your credit card, you can also take out a cash advance, a type of short-term loan that allows you to withdraw cash which you then repay with interest. Learn how you can benefit from a business credit card.

Start an application on the SmartBiz website here to see if you pre-qualify. Our online lending network matches you with the right bank or lending partner to meet your unique business needs.

Final thoughts

It’s a good idea to work with your accountant or another financial professional when you are planning to seek outside funding. An accountant can review your business plan and current financial situation to determine how much you should borrow and when you’ll need the funds. If you don’t have an accountant on your team, review our article about finding the right fit: How to find an accountant for a small business.

Many small businesses can get all accounting needs met by one outside accountant. Other businesses have more complex needs and require a full-service accounting firm. Some businesses prefer to have an accountant on staff. Once you’ve determined your needs and looked at your budget, you can decide which direction to go.


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