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New York businesses eligible for millions in funding thanks to Small Business Credit Initiative: Who will it help most?

Here comes the money.

Small businesses across New York will be eligible for funding allocated by the U.S. Treasury Department’s State Small Business Credit Initiative. It’s aimed at helping small businesses recovering from the lingering, economic impacts of COVID-19.

Governor Kathy Hochul says New York has been awarded $501.5 million in federal funds as part of the initiative, which was reauthorized and expanded as part of the American Rescue Plan Act.

Managed by the U.S. Department of Treasury, SSBCI provides funds to support programs for small businesses, with emphasis on those still struggling from the economic impact of the COVID-19 pandemic, and helping traditionally disadvantaged small businesses succeed in the post pandemic economy.

“Small businesses are the backbone of our economy, and far too many small business owners are still feeling the economic toll of the pandemic,” Governor Hochul said. “This historic funding will be a game changer – serving as a crucial lifeline for small businesses, fueling innovative growth, and helping uplift the most vulnerable communities across New York.”

Treasury Secretary Janet Yellen called the investment historic, pointing to continued growth of entrepreneurship. “This is an historic investment in entrepreneurship, small business growth, and innovation through the American Rescue Plan that will help reduce barriers to capital access for traditionally underserved communities. I’m excited to see how SSBCI funds will promote equitable economic growth in New York and across the country,” she said.

U.S. Senate Majority Leader Chuck Schumer agreed, noting that the funding would serve as a shot in the arm for New York’s small business community.

“This federal assistance will help support underserved businesses, invest in entrepreneurs and small businesses in key industries like manufacturing and clean energy to address the nation’s supply chain challenges, and create good-paying jobs in the communities that need them most,” he said.

Senator Kirsten Gillibrand, who also represents New Yorkers, shared that excitement. “I am so proud to have helped secure this historic federal funding,” she said in a statement. “This funding will provide critical resources and increase access to capital for our state’s small business owners.”

Here’s how it works and where the money will go

Through Empire State Development, New York State is establishing a suite of programs that will match federal support to the critical needs of the state’s small businesses. This programming includes a mix of new initiatives and the expansion of existing programs, focusing on capital access, loan guarantees, loan participation programs, collateral support, venture capital for fund managers and start-ups, and technical assistance. Proposed programs include: 

Capital Access Program: 

  • $29.4 Million Capital Access Program (Expansion of Existing Program) – These programs provide portfolio insurance to lenders that make loans to small businesses to incentivize the expansion of loaning to these entities.  

Affordable Debt Programs: 

  • $106.1 Million Capital Loan Fund (New Program) – Provides long-term capital investments via debt instruments and credit structures. The eligible uses for these capital loans is highly flexible, with a focus on providing capital support to socially and economically disadvantaged businesses. 
  • $55.5 Million Small Business Revolving Loan Fund (Expansion of Existing Program) – This fund will address inequitable capital access, to address gaps facing new companies, underbanked communities, small businesses which are more likely to be minority-owned. 
  • $47 Million New York Forward Loan Fund (Expansion of Existing Program) – A loan program funded with investors pooled capital, to make flexible, low interest loans to small businesses and nonprofit organizations, through participating Community Development Financial Institution (CDFI) lenders. 
  • $22 Million Bonding Guarantee Program (Expansion of Existing Program) – Provides surety bonding to reduce risks associated with bonding for small businesses. 
  • $22 Million Contractor Financing Revolving Loan Fund (New Program) – Provides needed funding to contractors in need of matching dollars to secure federal, state, and local contracts. 

Equitable Venture investments: 

  • $102 Million Emerging and Regional Partner Program Fund (New Program) – This program will support the growth and establishment of diverse, emerging, and regional private sector fund managers. 
  • $52 Million Community and Regional Partner Program Fund (New Program) – ESD will provide selected accelerators with funds that will be leveraged with private dollars to invest in New York State start-up companies. 
  • $30 Million Pre-seed and Seed Matching Fund Program (New Program) – ESD will work with angel groups and pre-seed investors across New York State to continue to support high growth start-up companies at the earliest stages of their growth and development. 
  • $35 Million New York State Innovation Venture Capital Fund (Expansion of Existing Program) – Since 2015, ESD has managed the New York Ventures fund, an investment program with more than 40 portfolio companies—65% of whom are founded or led by women and/or minorities. SSBCI funds would further capitalize this direct investment fund program. 

Over the next 90 days, Empire State Development will be establishing additional program criteria and guidelines, with formal program-specific application processes announced in the Fall.  

For more information, please visit esd.ny.gov/ssbci.

Categories: New York StateBusinessNews

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