Statewide Loan Pool for Business

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Presentation to Venture Association of New Jersey
3/16/04
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• Creates public/private partnerships to bridge
  financing gaps
  
• Effective financing resource for
• small businesses
• EDA helps attract retain businesses

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How the EDA assists businesses

• Technical assistance
• Financing assistance
• Real Estate Development

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Technology Programs

• Seed Capital Program
• Technology Funding Program
• Tax Transfer Certificate Program
• Springboard Fund

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New Jersey Seed Capital Program

• Eligibility
• Technology that exhibits strong likelihood of
  commercialization
  
• Formal detailed business plan
• Strong management team
• Operate within emerging technology sector
• In established business/incubator location
• Have begun product testing
• Able to raise capital from other sources

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New Jersey Seed Capital Program

• Structure
• Loans to businesses with established emerging
  technology that require capital to bring product
  to market
  
• Funding
• Single loan or in tiered increments

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Seed Capital Program

• BENEFITS
• Bridge the gap between equity and conventional
  debt
  
• Enables company to access full funding
• Improves cash flow with low cost financing

• FEATURES
• Source of early stage capital from 250,000 for
  W/C and 500,000 for F/A not to exceed 500,000
  combined up to 5 years
  
• Federal Discount Rate at approval with a floor of
  3.
  
• Flexible repayment of principal and interest

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Technology Funding Program

• Projects of up to 5 Million Partner with Bank
• 25 direct EDA participation up to maximum of
  500,000
  
• EDA guarantee up to 50
• - Maximum of 1 million for Working Capital
• - Maximum of 2 million for Fixed Assets
• EDA interest rate is variable based on Prime
  rate currently at 3 or Fixed based on
  comparative treasury with a floor of 4.
  

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New Jersey Technology FundProgram - Eligibility

• Received venture capital, other investor
  financing and/or raising funds through an
  IPO/private placement
  
• Received or close to obtaining regulatory
  approval
  
• Licensing arrangements with/selling to
  established companies
  
• Historic financial statements showing limited
  cash flow/profitability
  
• Reasonable forecasts of profits/cash flow to
  reach key milestones
  
• Detailed business plan

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Technology Business Tax Certificate Transfer
Program
Allows new and expanding technology and
biotechnology businesses to sell (for at least
75 value of benefits) their

• Unused net operating loss (NOL) carryovers
• Unused research and development tax credits to
  corporate New Jersey taxpayers

Business must have less than 225 employees
40 million available annually
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Technology Business Tax Certificate Transfer
Program
2003

• 189 Participants
• 260,000 per company
• 40 million disbursed

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(No Transcript)
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Springboard Fund

• Features
• Investments in early stage NJ Tech. Bus.
• Recoverable grant between 50K - 250K
• Competitive process selection of best tech
  start-ups with greatest chance of success
  
• Easy terms

• Benefits
• State sponsored support of technology at critical
  point of growth
  
• Repayment linked to bus. revenue up to 10 years
• Supports job creation and revenue generation for
  NJ in technology sector
  
• Unsecured and interest free

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www.njeda.com