Trenton – September 22, 2026 -- New Jersey Gov. Mikie Sherrill has signed bipartisan legislation (A5016/S4218) creating an Employee Ownership Transition Program and a revolving loan fund at the New Jersey Economic Development Authority (NJEDA) to finance conversions of businesses into employee-owned firms.
NJEDA revives a financing model that returned ninefold on its original loan
The new Employee Ownership Revolving Loan Fund reactivates a mechanism NJEDA first used 50 years ago to finance the employee buyout of the Okonite Company in Passaic County. That original loan was fully repaid and revolved nine times over; Okonite remains 100% employee-owned today and has distributed more than $300 million in ESOP payouts to workers. The fund can draw capital from state appropriations, federal sources including U.S. Economic Development Administration grants, and philanthropic capital.
Program covers feasibility studies, consulting and statewide outreach
Signed September 4, the legislation directs NJEDA to reimburse feasibility studies and consultative services for firms exploring employee ownership transitions, and to run statewide outreach in partnership with the NJ/NY Center for Employee Ownership at Rutgers University. State Senators Andrew Zwicker and Shirley Turner and Assemblymembers Lisa Swain, Roy Freiman, and Al Barlas sponsored the bill.
Lafayette Square Institute's policy playbook shaped the legislative design
The law builds on recommendations from Lafayette Square Institute's white paper, "Employee Ownership as Economic Development,