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A federal profile of small business in New Jersey this week showed the recession weighed on firms with fewer than 500 employees in 2008, even as job losses prompted more people to go into business for themselves.

So-called nonemployer firms - where the owner is the only staffer - jumped from 573,800 in New Jersey in 2006 to 590,000 in 2007, according to the most recent data available to the Small Business Administration's Office of Advocacy.

But in 2008, as the recession took hold, business closings in the state outnumbered openings, the report said. In 2007, there were 43,500 openings compared with 41,400 closings. The next year it reversed, with 43,100 closing and only 40,700 opening.

The average number of employees per new business in the state dropped as well, from 4.1 in 2007 to 3.8 in 2008.

This week's bankruptcy of New Jersey-based small-business lender CIT Group points to another difficulty: Even small businesses that can sell products and services in the recession are struggling to find the credit needed to launch and continue operations.

Joel Naroff, chief economist at Naroff Economic Advisors, said Monday that banks are still "fairly reluctant to lend across the wide range of firms."

But he was hopeful that CIT could become a credit source sooner than expected.

"The CIT bankruptcy will likely exacerbate current funding problems for small- to mid-sized companies, but the prepackaged nature of the filing may limit that disruption," Naroff said.

The SBA estimated that there are a combined 796,000 small businesses and self-employed people in New Jersey.

Contact Kevin Post:

609-272-7250

KPost@pressofac.com

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