BY CAREN S. FRANZINI
EXECUTIVE DIRECTOR, NJ ECONOMIC DEVELOPMENT AUTHORITY

From flexible low-cost financing programs, to customized laboratory and office space to business training for new and aspiring technology entrepreneurs, the New Jersey Economic Development Authority (EDA) offers creative solutions to meet the specialized needs of high-technology and biotechnology companies that locate and seek to grow in New Jersey. The EDA works closely with other state agencies and the high-tech community in New Jersey to understand financing and real estate requirements and to develop the tailored programs and services that support Gov. James McGreevey's goal of maintaining New Jersey's leadership role in technology and enhancing its reputation as an ideal environment for fostering technological innovation and commercial success.

Meeting Capital Needs
Whether it is seed money, expansion financing or the sale of tax credits, the EDA is able to meet the special capital needs of technology businesses. When the Precision Instrument Corporation decided to relocate from Virginia to Trenton, the EDA provided it with a $450,000 loan at a 7% fixed interest rate through its New Jersey Seed Capital Program. This enabled this emerging high-tech business to continue development of an electronic sensor system for lubricating fluids used in internal combustion engines.

Under the Seed Capital Program, the EDA can lend from $25,000 to $500,000 to technology businesses that already have established an emerging technology but need funding to bring their products to market. Eligible companies must have a formal, detailed business plan and a strong management team, operate within the emerging technology sector, and should have started product testing.

NFI Contract Manufacturing, LLC, a Vineland company using a natural insect repellent to make innovative new products, was able to install equipment it needed to market its products with EDA financing assistance. The EDA provided a $115,000 loan at an initial interest rate of 3% under its New Jersey Technology Funding Program which was combined with $345,000 in bank financing. The EDA participates with commercial banks to make term loans from $100,000 to $5 million under the Technology Funding Program. EDA direct participation may be up to $500,000 for working capital to meet operating costs or fixed assets such as buildings or equipment. The EDA also will consider up to a 50% guarantee of the bank's portion of the loan. The EDA's maximum exposure is $1 million for working capital and $2 million for fixed assets.

The EDA has provided more than $17.6 million in loans to 27 companies through these two programs.

The EDA's Technology Business Tax Certificate Transfer Program is another innovative offering that has drawn national attention. The program has proven to be an effective financing tool, providing $170 million that high-tech businesses have used to continue their research, raise capital and strengthen and build their business. Under the program, emerging technology companies can sell their unused net operating and research and development tax credits to a private corporate taxpayer for at least 75% of the value of the benefit. The selling company thus gets an infusion of cash it can use for a variety of business purposes.

A record 166 high-tech businesses with 225 or fewer employees that have at least 75% of their workforce in New Jersey were approved in 2002 to share the $40 million available through the program. June 30 is the deadline for companies to apply for the $40 million in tax certificate transfer awards available in 2003. Applications can be downloaded from www.njeda.com, the EDA's web site.

Offering Space to Grow
On the real estate side, the EDA's Technology Centre of New Jersey, a 50-acre complex that provides growing high-technology businesses with top-quality, customized laboratory, production and office space at competitive prices, has recently made 86,000 square feet of additional prime space available for lease. Nearly 330,000 square feet of space has been completed at the Technology Centre and there is room to accommodate up to 500,000 square feet of development. More than $100 million is being invested in facilities and improvements at the facility.

Technology Centre tenants include Cambrex, a life sciences company; Celgro, the agrochemical subsidiary of Celgene; Chubb Computer Services, a training and consulting business; Merial Limited, which produces animal pharmaceuticals and vaccines; and Rutgers University, which uses the facility for agricultural research. Seven additional tenants, all life sciences companies, occupy space in the 20,000-square-foot Commercialization Center for Innovative Technologies, which opened last year to serve small high-tech firms and incubator facility graduates. This facility, which is already more than 90% leased, provides tenants with shared office space, reception, conference, media and loading areas and services such as word processing and consulting.

An Advisory Committee brings a wealth of resources and experience to the center and includes representatives from the New Jersey Commission on Science and Technology, the Biotechnology Council of New Jersey, the New Jersey Technology Council (NJTC), Rutgers University, the University of Medicine and Dentistry of New Jersey, PricewaterhouseCoopers and the Sage Group, a high-tech consulting firm.

Importance of Partnerships
Partnerships and associations with organizations like Amper, Politziner & Mattia are instrumental in our efforts to support the growth of high technology businesses in New Jersey. For example, the Biotech Council was the force behind establishment of the Technology Tax Certificate Transfer Program, and we are a founding member of the New Jersey Biotechnology and Life Sciences Coalition, Inc., an organization of industry, university and government groups whose mission is to increase awareness of all the resources and support New Jersey offers to life sciences and biotech enterprises.

I am also a Board member of the New Jersey Technology Council which sponsors many programs and activities to benefit the state and its 1,200 members, including the NJTC Venture Capital Fund to which the EDA has committed more than $8 million. The fund addresses a critical need for capital by growing New Jersey technology firms and encourages more investments from venture capitalists in New Jersey companies. The EDA also worked with the Technology Council to initiate the formation of a network of angel investors called Jumpstart. In addition, the EDA recently approved the investment of $2 million in the New Jersey Nanotechnology Consortium, a member-owned and operated consortium launched by Lucent Technologies that should help high-tech companies develop and expand in New Jersey.

As part of our continuum of services to help high-tech entrepreneurs grow, we offer a specialized training curriculum for new and aspiring high-tech business owners as part of the Entrepreneurial Training Institute (ETI) program. ETI is sponsored by our affiliate, the New Jersey Development Authority for Small Businesses, Minorities' and Women's Enterprises, whose programs we manage. The success of the program, which was launched in 2002, underscores how important technology businesses are to the economic success of the state. The support of organizations like Amper, Politziner and Mattia in helping entrepreneurs learn the basics of operating their own business have made ETI one of the more successful programs of its kind throughout the country.

Key Contact Information
If you would like to learn more about how EDA may be able to meet your business needs, here is some key contact information:

For financing programs, contact the Commercial Lending Division at (609) 292-0187 or send an e-mail to cld@njeda.com. You can also learn more by visiting the EDA web site at www.njeda.com.

For lab and other space needs, contact the EDA's Real Estate Development Division at (609) 292-0369, send an e-mail to red@njeda.com or visit the Technology Centre's web site at www.njtechcentre.com. EDA sees opportunity in New Jersey's high-tech companies. Contact us to see how we can work together on innovation opportunities to build your business and New Jersey's economic future.

Amper was a sponsor of Private Equity 2003 — A National Venture Forum, held in March at the Yale Club in New York.

Ed O'Connell CPA, Technology Group member, wrote an article on "Financing Operations and Improving Cash Flow" for the March 2003 edition of TechNews.

Phil Politziner, President, and Alan Wink, Co-Director of the Technology Group, spoke at the New Jersey Manufacturing Summit on May 14.

Mike Sohmer, Technology Group member, wrote an article on "PIPE Financing" for the April 2003 issue of TechNews.