How to Select the Best Small Business Loan in New Jersey
If you’re ready to start a business or grow your existing operation, know that there are plenty of small business loans in New Jersey. The right options for you will depend on the nature of your organization as well as your unique goals.
In this blog post, we’ll explain what you need to know about securing business funding options in New Jersey.
New Jersey Business Loans are Versatile
Most business loans in the state can be used for a variety of purposes. This is great news if you need capital to cover several different expenses. If you’re a startup or newer Jersey- based business, a business loan may help you pay for insurance, marketing, payroll, equipment, and similar expenses.
As an established business in the state, however, you may use a loan to expand to new markets within or outside of the state. A loan can also make it easier for you to continue operations during the off season or slow periods. Or, it could simply serve as additional cash flow
8 Types of Small Business Loans in New Jersey
When you shop around for a small business loan program in the Garden state, consider these funding options. Note that the eligibility requirements and application process will depend on the business lender and loan type.
1. Small Business Loans
Offered by banks, credit unions, and alternative lenders, small business loans come with set terms, making it easy for the borrower to know when they’ll fulfill their obligations. However, application processes and interest rates will vary depending on the lender, so it’s important to read the loan contract fully before committing to a program.
2. SBA Loans
Guaranteed by the Small Business Administration (SBA), SBA loans offer great rates and long repayment terms. As long as you meet their rigorous requirements, SBA loans can be a good option. While some are intended for working capital, others can help you finance commercial property, equipment, or other expenses.
3. Commercial Mortgage
Unless you have plans to solely operate online, you will probably need a commercial property. A commercial mortgage is essentially a real estate business loan that can help you afford this high expense, whether you need an office, retail space, warehouse, restaurant, hotel, or any other type of property. If you have an existing property, a commercial mortgage may also expand your square footage.
4. Equipment Loans
Equipment loans are what they sound like: loans to help you cover the cost of equipment. Equipment can range from a scanner for your office to a bulldozer. As long as it’s intended for business purposes, you can pay for it with an equipment loan. Since equipment loans are secured and backed by your equipment, they’re easier to qualify for than other forms of financing.
5. Line of Credit
For a flexible loan, a line of credit can meet your needs. It differs from an installment loan because you’ll be able to borrow as much or as little as you’d like up to your set credit limit. If you’re unsure of exactly how much capital you need or would like the peace of mind of always having access to it, a line of credit is worth considering .
6. Merchant Cash Advances
If your business receives debit and credit card payments from customers, a merchant cash advance (MCA) may be a viable financing option. A merchant cash advance provider will give you funds in exchange for a percentage of your future card sales. This is a fast, short-term financing solution that requires minimal paperwork.
7. Invoice Factoring
Invoice factoring allows you to sell a portion of your business’ outstanding invoices to an invoice factoring company. You’ll receive cash quickly as the company will pay your invoices and then collect payments from your customers directly. Just like merchant cash advances, this is a short term financing option.
8. Emergency Financing
Since the start of the COVID-19 pandemic, New Jersey had worked to provide funding to affected business owners. For instance, the Small Business Emergency Assistance Loan program provided funding to New Jersey based business owners. Although the applications are currently closed, be sure to look into emergency business loan options in the future if you require it.
Resources for New Jersey Business Owners
If you’re a small business owner based in New Jersey, there are many resources that can guide you toward unparalleled success. Here are a few notable resources to take advantage of:
- New Jersey Small Business Development Center: These are located throughout the state and offer hands-on guidance. Whether you need help with your business plan, taxes, marketing, or anything else, you should definitely take advantage of it.
- NJ Research Asset Database: This free database is designed for entrepreneurs and businesses to look for science, technology, engineering, and mathematics or STEM experts and learn about their professional backgrounds and achievements.
- NJ Business Helpline: With the NJ business helpline (1-800-Jersey-7), you can receive free advice on how to start and incorporate a business in the state. The helpline may also be useful during natural disasters or emergency situations.
- New Jersey Professionals: There are countless professionals in New Jersey specializing in law, accounting, bookkeeping, taxes, marketing, and more. These members of the business community can support you with various aspects of your business.
- Jersey Economic Development Authority: The NJEDA works to create job opportunities and economic growth in New Jersey.
- New Jersey Community Development Corporation: This organization also strives to improve New Jersey’s economic condition and has various initiatives in place.
Conclusion: Grow Your Business with New Jersey Business Loans
If you own a business in the Garden State or want to start one, securing a small business loan in New Jersey can support your inception and long term growth. By pairing them with the various statewide resources available to you, you’re bound to succeed.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.