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Lending initiatives for small firms set

The New York Business Development Corp.–Business New York has introduced two pilot loan initiatives to stimulate small-business lending across the state.
The first program makes a total of $2.5 million available to companies located in economic-development zones.

Lending initiatives for small firms set

The New York Business Development Corp.–Business New York has introduced two pilot loan initiatives to stimulate small-business lending across the state.
The first program makes a total of $2.5 million available to companies located in economic-development zones. The NYBDC/Bank Partnership Loan Program, the second option, establishes a $5 million low-interest financing pool.
Both of the new programs offer below-market, competitive interest rates to small businesses.
“These two new initiatives are efforts to intensify lending activity in the state,” said Robert Lazar, NYBDC president and CEO. “By making financing available at dramatically attractive rates, NYBDC-Business New York hopes to spur business growth from Long Island to Buffalo.”
The EDZ loan program provides 9.5 percent fixed interest rate loans of up to $250,000 each to businesses unable to access traditional bank financing, he said. The loans can be used for working capital, refinancing of debt or equipment purchases.
The loans mature in less than seven years and must have at least a 75 percent Small Business Administration guarantee. In keeping with the economic development mission of the economic development zones, Lazar said, loans provided through the EDZ program are expected to stimulate job creation and growth.
The NYBDC will consider adding another $2.5 million to the pool if the program is deemed successful.
The bank-partnership program is available in situations where a member bank is willing to finance 50 percent of the loan. The NYBDC would finance the other half.
For this program, NYBDC has reduced its normal interest rate to prime for a loan not guaranteed by the SBA and to prime plus 0.5 percent for an SBA-guaranteed loan, Lazar said.
These rates are in effect until maturing of the loan, Lazar said. As with the EDZ program, NYBDC will consider providing more money, in this case $5 million, if the program is successful.
NYBDC is a privately owned financial organization established by the state Legislature and funded by 150 banks across the state. It has offices in New York City, Rochester and Albany, and provides long-term financing for small businesses that are not eligible for standard bank loans. Its gross loan portfolio is $155 million.

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