NJEDA opens 2023 NOL program application

The New Jersey Economic Development Authority (NJEDA) announced opening applications for its 2023 Technology Business Tax Certificate Transfer Program May 3, commonly referred to as the Net Operating Loss (NOL) Program.

The initiative offers the opportunity for New Jersey’s early-stage technology and life science businesses to sell a portion of their net operating losses and unused research and development (R&D) tax credits to corporations for cash.

Gov. Phil Murphy has allotted $75 million for the program, with a lifetime cap for an individual applicant of $20 million.

The governor has also called for $15 million of that $75 million allocation to be reserved for the surrender of transferable tax benefits exclusively by eligible companies operating within the state’s three Innovation Zones of Newark, Camden and the Greater New Brunswick area; companies located in Opportunity Zones; and/or women- or minority-owned businesses certified by the state.

Since its inception in the late ’90s, the NOL Program has distributed more than $1.17 billion in funding to over 570 technology and life sciences companies. Last year, the average award for companies approved to sell their net operating losses was over $3.1 million.

Participants can use the capital raised to help cover operating costs such as salaries, R&D, and other working capital expenditures.

“The NOL Program was a constant source of funding for us and was among the many state resources that helped sustain us until we were acquired by Qorvo in 2021,” said Christopher Dries, former United Silicon Carbide president and CEO and current general manager of power device solutions for Qorvo. “My advice to entrepreneurs just starting out is simple: Apply for this program. It gives you cash without requiring you to give up equity.”

The announcement comes in the middle of National Small Business Week.

“It’s fitting that the application for this year’s NOL Program opened during Small Business Week, as the program routinely helps companies keep their lights on, their employees paid, and propels their research and development forward,” said NJEDA Chief Executive Officer Tim Sullivan.

“Given the broad range of acceptable funding uses, the NOL Program has been hailed for decades as a lifeline for emerging companies that have yet to reach profitability,” said NJEDA Chief Economic Transformation Officer Kathleen Coviello. “The ability to secure an average award of over $3 million without giving up any equity makes this extremely attractive to entrepreneurs. At the same time, it complements the state’s many assets as an attraction tool for entrepreneurs choosing to grow their businesses in New Jersey.”

More information on the program and the application, being accepted through June 30, can be found here.