Legislation to Expand Lending for NJ Vineyards and Wineries
Legislation geared towards establishing a loan program for vineyard and winery capital expenses was released by the Assembly Commerce and Economic Development last month. The bill (A-4274) would direct the New Jersey Economic Development Authority (“EDA”), in consultation with the Department of Agriculture (“Department”), to create a loan program and application process for the purpose of supplying loans to certain eligible vineyards or wineries to pay for qualified capital expenses.
Vineyard is defined in the bill to mean agricultural lands in the State of New Jersey “consisting of at least 1 contiguous acre dedicated to the growing of grapes or other fruit that are used or are intended to be used in the production of wine by a winery as well as any other plants or other improvements located thereon.”
Winery is defined as a “commercial farm where the owner or operator of the commercial farm has been issued and is operating in compliance with a plenary winery license or farm winery license.”
Qualified capital expense is defined as “all expenditures made by an eligible vineyard or winery for land acquisition or improvement, infrastructure acquisition or modernization, and the purchase or modernization of machinery and equipment…”
Under the bill, if an applicant applies and qualifies for the loan, the loan amount must be between $10,000 and $100,000, plus interest, which may be repaid in a term up to ten years. If the borrower plans to use funds from the loan to acquire more property in order to expand its business it may be eligible for higher loan amounts with lower interest rates set by the EDA and Department. The bill will now go to the Assembly Speaker for further consideration.
The bill represents a step in the right direction for vineyards, wineries, and alcohol beverage manufacturers in general since one of the greatest challenges for small business manufacturers is obtaining startup financing for their venture. Hopefully the legislature enacts the law and eventually expands the reach of the program to allow eligibility for New Jersey craft breweries and distilleries.