A new, $100 million business loan program will target small businesses focusing on MWBEs, nonprofits and small landlords that did not receive federal COVID-19 assistance, Gov. Andrew Cuomo said on Friday.
Eligible nonprofits can apply for a 60-month, no-fee loan at 2 percent fixed interest; while eligible small businesses and landlords who own small multi-family rental portfolios can apply for a 60-month, no-fee loan with a 3 percent fixed interest rate. The maximum loan amount is $100,000, officials said. Loan funds can be used for working capital including payroll, operating and emergency maintenance, property taxes, utilities, rent and supplies.
“Under Governor Cuomo’s leadership, we will rebuild the New York State economy stronger and smarter in the wake of the COVID-19 pandemic. The New York Forward Loan Fund will support this vision by providing vital financial support to small businesses – the lifeblood of local and regional economies – as well as non-profit groups that did not receive federal aid,” said Empire State Development Acting Commissioner and President and CEO-designate Eric Gertler. “Thanks to a strong public-private partnership with banks and foundations from across the state we are able to help these organizations manage during these difficult times and prepare for the stronger, healthier New York of tomorrow.”
The New York Forward Loan Fund works by enabling five Community Development Financial Institutions (CDFIs) to make loans to the target borrowers: Accion East, Community Preservation Corp., National Development Council, Pursuit and TruFund Financial Services. New York State is providing first-loss capital to support a Special Purpose Vehicle (SPV) that will purchase locally originated loans, with foundations and philanthropies offering the next layer of loss capital.
Banks, in the form of senior debt, will lend to the SPV. More than $100 million is expected to be available in the program, with 65 percent reserved for small businesses, 30 percent reserved for small landlords and 5 percent reserved for nonprofit organizations.
Six banks have pledged support for the New York Forward Loan Fund: Apple Bank, BNB Bank, Evans Bank, M&T Bank, Morgan Stanley and Wells Fargo. Additionally, the fund has received philanthropic commitments from the BlackRock Charitable Fund, Citi Foundation, Ford Foundation and the Ralph C. Wilson, Jr. Foundation.
“Gov. Cuomo has been clear that the economic recovery from COVID-19 will require innovative approaches to help businesses and organizations across New York survive. By leveraging the resources of state agencies with private lenders and philanthropy, we have created a loan product specifically tailored to addresses the immediate needs of small businesses, small property owners and non-profit organizations that are facing a significant financial hardship due to this pandemic,” said RuthAnne Visnauskas, New York State Homes and Community Renewal commissioner. “At Homes and Community Renewal, we understand the outsized impact the economic downturn is having on renters in New York, but we also realize that small landlords are likewise struggling. Providing owners of small multi-family properties with financial relief is crucial at a time when maintaining our housing stock takes on renewed importance.”
New York is home to nearly 487,000 small businesses that employ fewer than 20 people each, representing 91 percent of the state’s small businesses. Applicants are required to prove they employ 20 or fewer full-time equivalent employees and have gross revenues of less than $3 million.
The New York Forward Loan Fund will emphasize supporting minority- and women-owned businesses and landlords who own small multi-family properties in low- and moderate-income communities, which have traditionally been underbanked or have difficulty accessing capital.
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