Small Business Investment SMBX Breakfast

The Mercer County Office of Economic Development has partnered with SMBX to host a breakfast forum regarding a new Mercer County Small Business Investment Program. The program is helping small businesses raise funding directly through retail investors locally and nationwide on the SMBX marketplace.

The free event is on Wednesday, September 27, 2023, at 8:30 a.m. at the Mercer County Fire Academy, 350 Lawrence Station Road, Lawrence Township. Breakfast will be served so please register through the link below or MC-invitation-9-27-23 to directly access the event flyer.

http://smbx.in/mcsmb

Mercer County is providing funds to two different Small Business Investment products. These funds are being used to leverage existing Bond and Loan products. ARPA funds are being used to buy down interest rates, cover application and underwriting costs and cover other ancillary loan product costs and marketing investments – making these products free for Mercer County Small Businesses to apply and participate.

The Small Business Bond Pilot Program and the Zero-Interest Loan Program are launching August 1, 2023.

Please see both Program Descriptions below.

SMBX Small Business Bond Pilot Program

• Business Type: 30 or fewer employees
• Business Location: all of Mercer County
• SMBX Program Website: Mercer County Small Business Investment Program (thesmbx.com)
• Businesses need to be established on or prior to April 10, 2023

Description:

Mercer County has identified SMBX to pilot Small Business Bonds in Mercer County. SMBX is a two-sided small business marketplace that connects qualified small businesses with investors in their communities and throughout the country. The Small Business Bond debt product will be offered – where anyone in the community (and further) can invest in the small business for as little as $10 and be repaid principal and interest over the loan period (estimated between 7 and 11%). SMBX will conduct all necessary outreach, promotional material development, and provide guidance to small businesses to ensure the best possible outcomes for interested Mercer County small businesses. SMBX would provide bond financing for business that may not be able to receive financing through traditional banking means.

Mercer County awarded a $500,000 grant to SMBX to manage the program and drive retail investment to at least thirty (30) Mercer County small businesses on the SMBX marketplace. The funds will keep the program free for small businesses.

Here’s how the program will work:

● Businesses can raise money by issuing Small Business Bonds on the SMBX marketplace.

● Instead of borrowing from a bank, businesses borrow from investors in their community and across the country, paying them back monthly at fixed interest rates through SMBX.

● Small businesses are not required to provide a personal loan guarantee.

● SMBX completes the underwriting at no cost, the business reviews it, and SMBX files it with federal regulators.

● The SMBX marketing team works with the business owners to offer and promote their raise.

● Once the raise is completed, the business makes monthly fixed payments to its investors so it knows exactly what to expect for its cash flow.

● By purchasing Small Business Bonds in $10 increments through the Mercer County Small Business Investment Program, investors can earn a meaningful monthly return by lending money to their favorite local small businesses while gaining more control over their money.

Small business qualifications:

● Physical business located in Mercer County;

● For-profit business registered with the State of New Jersey, and formed on or before April 10, 2023;

● 30 employees or less, with part-time equating to ½ full-time employee;

● Less than $10 million in gross revenue;

UCEDC Zero-Interest Loan Program

• Business Type: 30 or less employees
• Business Location: all of Mercer County
• UCEDC Program Website: [website to come]
• Businesses need to be established on or prior to April 10, 2023

Description:

Mercer County has identified UCEDC to provide a 0% Interest Loan program to Small Businesses in Mercer County. To provide the businesses in Mercer County with affordable and accessible capital, UCEDC will offer loans utilizing our current lending products and capital. They would market these with the following terms:

• Businesses must be located in Mercer County, registered with the State of New Jersey and have been formed on or before April 10, 2023

• Businesses must have 30 full-time equivalent employees or less at time of application and have less than $10 million in annual gross revenue based on most recent tax return

• Loans will range from $10,000 to $20,000

• Loans will be offered at 0% interest, with a five-year repayment term

• Funds can be used for working capital, inventory, or purchases of furniture and equipment

• No collateral requirements, pre-payment penalties, processing, closing or application

fees

• Personal guarantees of the significant owners of the business (10% or greater) are

required

• Applicants must not have had a bankruptcy or significant charge-offs within the most recent 3-year period

Through the Mercer County loan program, UCEDC would provide $750,000 of lending to small businesses located in Mercer County. With an average expected loan amount of $15,000, given the parameters above, they would provide funding to approximately 50 businesses in the target market.

Updated July 28, 2023