Small businesses and nonprofits may now find expanded access to capital and support services.
Through the New York Forward Loan Fund 2, eligible candidates with fewer than 100 employees and less than $5 million in gross annual revenue can apply for loans up to $150,000. According to the state, the loans feature affordable, fixed-rate interest rates.
The program is part of the State Small Business Credit Initiative efforts led by Empire State Development. In place for the next eight years, the fund is designed to help small businesses and nonprofits, “especially those in those in low-income and historically underbanked communities and rural areas,” according to a news release about the fund.
Through the fund, recipients would have access to flexible working capital for such expenses as payroll, marketing and facility renovations.
The program also offers free support services from advisors at New York’s Entrepreneurship Assistance Centers and Small Business Development Centers throughout the life of the loan.
“New York’s small businesses are the lifeblood of our state’s economy and vital to growing and strengthening New York State,” Gov. Kathy Hochul said in a statement. “With expanded eligibility, this new and improved New York Forward Loan Fund will build on the success that the first fund achieved supporting small businesses during the pandemic and continue to help even more small businesses grow and thrive across the state.”
The New York Forward Loan Fund was initially designed to provide hands on support and access to flexible, affordable credit to the smallest businesses across New York who lacked access to affordable credit options in response to COVID-19, according to the state.
But the state found that it needed to create a program to address inequities in distribution of funds and because smaller loans were not widely available in the market at affordable rates. The original fund processed more than 1,700 loans and distributed $97 million in pandemic relief to small businesses and was aimed at serving as a life-line, especially for women and minority-owned companies. More than 50% of loan recipients had never applied for a business loan prior to the New York Forward Loan Fund.
Now, officials said, expanded eligibility will allow more candidates to qualify for loans.
Working through Community Development Financial Institutions (CDFIs), New York Forward 2 aims to disburse an initial $150 million with plans to recycle and lend additional funds over the life of the program. CDFIs will assist in accomplishing the program’s broader goal of investing in underfunded businesses, specifically people of color, women, veterans and the LGBTQ+ community.
“The New York Forward Loan Fund 2 was designed to be a stable, flexible resource for New York’s small business community across the state to access capital when they need it,” Empire State Development President, CEO and Commissioner Hope Knight said in a statement.
“This innovative program will match small businesses to strong, statewide CDFI lenders who can provide individualized service and technical assistance, especially for business owners who have credit needs that are too small for most banks,” Knight added.
“For small businesses and nonprofits that often operate on razor-thin margins, unexpected costs can quickly become a serious problem,” State Sen. Sean Ryan, who chairs the Committee on Commerce, Economic Development, and Small Business, said in a statement .
“This expanded program will allow more New York entrepreneurs to take advantage of low-cost loans and other services that have already helped nearly 2,000 small businesses and nonprofits across the state,” he added.
The fund is managed by Calvert Impact and administered by the Community Reinvestment Fund in close partnership with private sector partners that include Citi Foundation and Wells Fargo. For more information and to apply, visit NYLoanFund.com.
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