New Jersey Senate Bill S848

New Jersey 2022-2023 Regular Session

• Introduced: 1/18/22
• Refer: 1/18/22

Caption

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.

Impact

The intent behind S848 is to stimulate economic growth and support veteran entrepreneurship by easing financial barriers for veteran-owned businesses. By adjusting the loan terms, the bill seeks to ensure that veterans can transition into business ownership more seamlessly and sustainably. This legislative action may also encourage job creation within the state as businesses receiving these loans are expected to commit to increasing full-time employment levels.

Summary

Bill S848 mandates the New Jersey Economic Development Authority (EDA) to offer loans to eligible veteran-owned small businesses under more favorable conditions compared to other small enterprises. The legislation aims to provide these businesses with loans at significantly lower interest rates and more flexible repayment options. Specifically, loans to businesses with at least 50% veteran employees may bear an interest rate as low as zero percent if the veterans have a service-connected disability.

Contention

Notable points of contention surrounding S848 focus on the differentiation in loan conditions based on ownership demographics. Proponents argue this is a justified and necessary measure to honor the service of veterans and help them succeed in their business ventures. Critics, however, might raise concerns about fairness in state financial support, wondering if linking loans to veteran status might be seen as preferential treatment. Moreover, there may be discussions around the potential financial burden on the state if the loans are not repaid, as they are providing loans with no fees and reduced interest rates.