New Jersey supports businesses exploring a shift to employee ownership

The New Jersey Economic Development Authority pays approved contractors to study whether businesses can shift to employee ownership. Study assistance covers New Jersey businesses with at least 20 full-time employees when their applications are approved. Businesses must be in substantial good standing with state agencies, provide a tax clearance certificate current at approval, and meet the authority’s additional requirements. Assistance requires approval, available program money, and a written agreement among the business, contractor, and authority. The authority may carry out the program by continuing an existing program. The law takes effect immediately upon approval.

The authority provides low-interest loans through an employee ownership loan fund. Loans serve New Jersey businesses with at least 20 full-time employees and other entities the authority approves. Applicants must complete an employee ownership feasibility study before applying and receive the authority’s approval. Financing depends on available money. Loan agreements set interest rates, repayment terms, and allowed uses. Businesses applying under the standard eligibility rules must be in substantial good standing with state agencies and meet any additional authority requirements.

The authority publishes employee ownership resources and provides education, outreach, and early planning help. Education reaches employers and employees, including small or start-up businesses with fewer than 20 employees. Advice for carrying out a transition goes to participating businesses that choose employee ownership after completing a feasibility study. Employee ownership means employees own shares in the business or have a right to their value.