Redeveloping commercial property in New Jersey? You might be eligible for one of the state’s many grant programs. We’re taking a look at what type of grants are available, who can apply, and important things to consider before going down this financing route.
What are grants?
Grants are financial resources, usually provided by city or county governments, to support various types of community and economic development projects.
In New Jersey, and elsewhere, grants are often aimed at revitalizing neighborhoods, encouraging small business growth, preserving historic sites, or promoting environmentally sustainable practices.
They’re typically part of broader efforts to improve local economies, enhance quality of life, and make cities more attractive — both for residents and investors.
Depending on the specific program’s goals, commercial property grants may cover a wide range of expenses. For example:
- property renovations
- equipment purchases
- energy-efficient upgrades
- hiring local talent.
Most grants only pay for a percentage of the full project cost. If you’re still struggling, even with grant support, there are other funding solutions for cash flow problems available.
Why apply for grants?
Grants can be powerful tools for growth, innovation, and community impact. Some of the reasons you may want to apply for one:
- They don’t (usually) need to be repaid: Grants provide capital without any interest or repayment obligations. However, you may have to pay back part or all of a grant if you don’t meet the program’s requirements.
- Credibility and validation: Grants are competitive, and are awarded based on thorough evaluations. Winning can serve as an endorsement of your project’s value and feasibility. This recognition can make it easier to attract additional funding from investors, partners, or lenders.
- Valuable networking and partnership opportunities: Grants are usually aimed specifically at high-impact projects, so recipients gain valuable networking opportunities and partnerships within those industries or causes. These connections can lead to further support, visibility, and collaboration that you may not get otherwise.
- Encourages strategic planning and long-term goal-setting: The rigorous application process often requires organizations to develop clear objectives, detailed financial projections, and impact assessments. This can help you to refine your vision and develop a roadmap that strengthens your overall mission and growth trajectory.
Who can apply for property grants in New Jersey?
Generally speaking, grants are intended to support anyone who will bring positive economic, social, or environmental impacts to their communities.
Every grant has different eligibility criteria, meaning different people and organisations are encouraged (or discouraged) from applying.
Depending on the grant’s eligibility criteria, applicants can include small business owners, real estate developers, nonprofits, and sometimes even individuals.
Commercial property grants available in New Jersey
The New Jersey Economic Development Authority (NJEDA) provide grant funding for a number of real estate development projects, with opportunities for both developers and small business owners looking to purchase or revitalize commercial buildings.
While grant opportunities open and close regularly, with new grants being funded all the time, these are some of the most interesting grants for those planning to participate in New Jersey’s economic revitalization.
Small Business Improvement Grant
This grant provides up to $50,000 to small business owners to improve the commercial property that they use. As well as covering improvements such as new furniture, fixtures and equipment, it also covers renovations to the premises.
This is a worthwhile grant for those who want to increase the value of a commercial property that they already own and operate from.
Find out more on the NJEDA website.
NJ Small Business Lease Grant
The NJ Small Business Lease Grant pays 20% of a commercial tenant’s total annual lease payment, if they’re leasing a new or larger space. This is intended to support small businesses and non-profits by encouraging them to expand into spaces they may not be able to afford without support.
While it’s not necessarily for property investors, it’s worth making prospective tenants aware of this grant. They might not realize that assistance is available to help them move into one of your larger properties.
The NJEDA website has further information about this grant.
Atlantic City Revitalization Grant Program
The Atlantic City Revitalization Grant program is a pilot program awarding grants between $1M and $10M for capital projects that address and improve the communities and neighborhoods in Atlantic City.
Applicants may request a grant amount from a minimum of $1M to a maximum of $10M. This should cover up to 50% of the cost of the project, so it may be necessary to seek additional financing. The only eligible location is Atlantic City, so this is a worthwhile grant if you’re planning a project there.
While the grant is not currently accepting new applications, you can keep up to date with whether this changes at NJEDA’s official site.
The Main Street Acquisition Support Grant
Introduced in February 2024, this grant program offers up to $50,000 per applicant, and is intended to reimburse a portion of closing costs for small business owners who purchase an existing commercial property.
This is only available to those who will operate their business out of the premises: so it’s not suitable for property developers. It also only offsets the cost of purchase, rather than the price of the property itself, so it’s likely that applicants will need additional financing.
We’ve written about the benefits of partnering with a hard money lender, which could be an avenue to explore.
Grant applications are currently open on the NJEDA website.
Historic Property Reinvestment Program
This grant covers rehabilitation projects in New Jersey, where the developer wants to breathe life into properties with historical significance. This grant is specifically for commercial properties and/or residential rentals.
To qualify, the property must be marked as a significant historical building: for example by appearing on the National Register of Historic Places or the New Jersey Register of Historic Places.
The funding is provided through tax credits, and covers up to 45% of the rehabilitation cost (up to a maximum of $50 million). Find out whether the grant is currently open for applications over at NJEDA.
The Brownfields Redevelopment Incentive Program
One for developers, the Brownfields Redevelopment Incentive Program provides a one-time transferable tax credit to incentivize any remediation, abatement and demolition activities. These works should allow for brownfield sites to be redeveloped for commercial, retail and mixed-use developments.
For most brownfield projects, developers can claim up to 60-80% of the cost of remediation (up to $8-12 milllion).
While this rolling grant is not currently accepting applications, you can sign up for notifications and updates at NJEDA’s website.
The Real Estate Gap Financing Grant Program
This $10 million pilot program is intended to provide grants for real estate projects in distressed, eligible locations. The development project should address the negative economic impacts left over from the COVID19 pandemic.
As well as being available for commercial property, this grant is also available for mixed-use developments, non-profit and community use projects, cultural venues and manufacturing or industrial buildings.
The minimum funding request is $500,000 per project and the maximum is $5 million per project.
Find out more on the grant’s official page.
What to think about before applying for a grant
While grants can provide a welcome financial boost for your commercial property project, they’re not always the best option for everyone. Before going down this route, it’s worth thinking about some of the stumbling blocks you may encounter:
- Time-intensive applications: grant applications require detailed documentation: including business plans, project proposals, financial statements, and sometimes environmental or community impact assessments
- High competition: many grants have specific application cycles, creating intense competition during these periods. This can lead to delayed project timelines as applicants wait for results
- Uncertainty around approval: Unlike commercial mortgages, grants are highly competitive and come with no guarantee of funding, even for qualified applicants. You might put a lot of time and resources into an application, only to be denied. This unpredictability can make financial planning difficult.
- Strict compliance and reporting requirements: Grant recipients are often obligated to use funds exclusively for designated purposes, and face periodic audits to ensure compliance.
- Repayment obligations: While grants are often seen as “free money,” some come with repayment obligations under specific conditions, known as “clawbacks.” If you fail to meet the grant’s terms, you may be required to repay part or all of the grant.
- Impact on business financials: Many grants ask businesses to match a percentage of the funding or cover costs upfront, with the grant reimbursing expenses later. Additionally, the time spent applying for and managing grant funds often diverts resources from other revenue-generating activities.
Before applying, you need to weigh the potential drawbacks and determine if the time, compliance obligations, and uncertainty align with your project goals.
Consider multiple forms of financing
While New Jersey’s commercial property grants can provide critical financial assistance for eligible projects, they can also introduce a number of complexities.
As well as accounting for potential upfront costs, repayment risks, and administrative expenses, you also need to think about the opportunity cost of diverting time and resources away from core operations. This is why it’s important to assess the total financial impact of a grant before deciding to apply.
For a more certain form of funding, it’s worth considering a private money lender like Express Capital Financing. While grants can take a long time to be approved, our lite doc commercial mortgages and full doc commercial mortgages can provide you with quick, upfront financing to get your commercial real estate project in New Jersey off the ground.
