NJ Will Help Entrepreneurs Pay Their Rent
Gov. Phil Murphy is pressing ahead with a plan to spur innovation and help already established high-tech firms in the Garden State.
During a visit to the Princeton Innovation Center BioLabs, Murphy announced the creation of the Incubator and Collaborative Workspace Rent Initiative and updating of the Research and Development tax credit.
The Workplace Rent Initiative will assist new start-ups with rent at so-called incubators, accelerators and other collaborative workspaces in New Jersey.
“These are the spaces where the next great leaps in technology and the life sciences will be made by new companies doing cutting edge research and development,” said Murphy.
“New Jersey is currently home to 29 incubators, seven accelerators, and 31 co-working facilities. I believe those numbers will go up meaningfully. We are poised for growth.”
He said the New Jersey Economic Development Authority will provide grants for two to six months of rents for start-ups to work at collaborative work spaces. The workspace will be asked to co-invest for half that amount.
The EDA will initially invest $500,000 to fund the program.
The maximum benefit for a start-up company would be $15,000.
Murphy said the EDA would also provide up to three months of additional rent payment support if the workspace was in an Opportunity Zone census tract, if the start-up was recently established or if it was affiliated with either a university or hospital system.
“This in total will allow entrepreneurs to commit their limited capital to things like talent acquisition or product development and to not sink more of it into rent.”
He pointed out giving start-ups the chance to be in this kind of environment is important.
“Companies nurtured in an incubator have a reported survival rate of 87 percent, nearly double that of those that go it alone," he said.
Murphy also announced the state’s existing research-and-development tax credit is being modernized so innovative companies can take advantage of new research categories and larger available credits. The state has had an R&D tax credit on the books since 1992.
He noted this effort will align New Jersey with current federal law that makes credit more generous and more accessible to R&D companies in the Garden State.
“This is the type of tax credit we need to spur our innovation economy.”