New York Governor Kathy Hochul recently announced that small enterprises and nonprofit organizations in the state are now eligible to apply for loans up to $150,000 through the New York Forward Loan Fund 2 program.
The state declared that the $150 million fund will increase the program’s funding and widen the eligibility requirements. As a result, more companies can be approved for loans.
Loans up to $150,000 with manageable, fixed-rate interest rates are available to qualified applicants with fewer than 100 workers and less than $5 million in gross annual revenue.
The announcement is a component of Empire State Development’s larger State Small Business Credit Program efforts in New York. The fund will operate for the following eight years with a focus on assisting small businesses and non-profits, particularly those operating in low-income and historically underbanked communities and rural areas, to access flexible working capital to cover a variety of costs, from payroll and marketing to facility renovations. Along with this, firms will receive free assistance from professionals for the duration of the loan.
According to Hochul, small businesses in New York are essential to the expansion and support of the state’s economy. “With expanded eligibility, this new and improved New York Forward Loan Fund will build upon the success that the initial fund achieved assisting small businesses during the pandemic and continuing to help even more small businesses grow and thrive across the state.”
In response to the coronavirus (COVID-19), the New York Forward Loan Fund was initially created to offer practical assistance and easy access to flexible, inexpensive finance to the smallest enterprises around New York. To address disparities in the distribution of funding and because there weren’t many readily available smaller loans on the market with reasonable interest rates, the state had to develop its own scheme.
More than 1,700 loans were processed by the initial fund, and small businesses received $97 million in pandemic relief. According to the state, it provided a lifeline for businesses run by women and minorities in particular. Prior to the New York Forward Loan Fund, more than half of loan beneficiaries had never applied for a business loan.
New York Forward 2 seeks to distribute an initial $150 million through Community Development Financial Institutions (CDFIs), with the intention of recycling and lending more monies during the course of the program. According to the state, CDFIs will support investments in underfunded businesses, particularly those owned by people of color, veterans, women, and members of the LGBTQ+ community.
Accion Opportunity Fund, Ascendus, NDC’s Community Impact Loan Fund, TruFund Financial Services, and Pursuit are some of the lenders for New York Forward Loan Fund 2.
The free consulting services provided by New York’s Small Business Development Centers (SBDCs) and Entrepreneurship Assistance Centers (EACs) are also available to participating enterprises and non-profits. The state claims that even if a borrower doesn’t meet the requirements for a loan and doesn’t match with a lender, they may still work with advisors to create a business plan, increase their profitability, and put themselves in a better position for future loans. In cooperation with organizations from the commercial sector including the Citi Foundation and Wells Fargo, the Community Reinvestment Fund and Calvert Impact are responsible for managing and administering the fund.