The New York Business Development Corp. has formed seven regional lending groups that will use capital from banks statewide to increase the amount of credit available to small businesses, Sen. Charles Schumer announced Thursday.
Some $6.1 million has been pledged by the banks so far, said Schumer, D-N.Y.
The Credit for Success Program will establish regional loan pools as a source of funding for businesses seeking to grow and expand but that cannot secure financing because of the credit crunch, Schumer said.
“Small businesses will be at the tip of the shovel that digs out of this down economy, but only if we can get them the resources we need, and prevent the credit crunch from strangling their efforts to expand,” Schumer said in a statement.
Lending decisions for the program, patterned after Ulster County’s Credit for Success Program, will be made by the NYBDC pursuant to rigorous underwriting standards, Schumer said. All loans must comply with U.S. Small Business Administration lending criteria, but the program’s structure will enable banks to increase their lending.
Some 25 banks have agreed to join the regional consortiums, with discussions under way with 36 others, Schumer said.
Seven banks in Rochester and the Finger Lakes region have pledged a total of $1 million, Schumer said. They are First Niagara Bank, HSBC Bank N.A., KeyBank N.A., Lyons National Bank, Northwest Savings Bank, Steuben Trust Co. and the NYBDC, he said.
“The regional lending consortiums are a natural extension of NYBDC’s core mission: to provide access to the capital necessary for small businesses to start, sustain and grow operations and thereby facilitate opportunity and economic prosperity in New York State,” NYBDC president and CEO Pat MacKell said in the statement.
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