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New York State has expanded the Small Business Revolving Loan Fund 2 to provide shorter-term microloans and regular loans.
The program is designed to address inequitable capital access by bridging financial gaps faced by new companies, under-banked communities and small businesses.
The state hopes that access to short-term capital by small, micro and socially and economically disadvantaged individual-owned businesses will drive economic activity. Officials believe it will be especially helpful for businesses that have faced historical barriers when trying to obtain credit or adequate loan terms.
The first round of the Small Business Revolving Loan Fund launched in 2010 with 25 million in funding and provided nearly $280 million in loans to small businesses.
“Small businesses are the backbone of our economy,” said Assemblymember Harry Bronson (D-Rochester), chair of the Assembly’s Standing Committee on Economic Development, Job Creation, Commerce and Industry. “Accessing funding for upgrades, to hire and retain employees, and grow has often been a struggle.
“The Small Business Revolving Loan Fund is changing this by offering flexible funding to our expanding pool of small entrepreneurs. This will help New York State develop a more equitable, diverse and stable economy where small businesses of all kinds can thrive on their own terms.”
Business owners may apply through a participating Community Development Financial Institution. Participating lenders use the capital from the program along with matching capital from other resources to enhance available funding.
Typical loan uses are for working capital, acquisition and/or improvement of real property, acquisition of machinery and equipment, and in some cases refinancing debt.
Microloans are for between $500 and $25,000. Regular loans are typically as large as $250,000.
Eight lenders are participating in the program, but only NYBDC (doing business as Pursuit Lending), will service the Rochester area. NYBDC has $3 million in available loan funding for applicants across the state.
The other seven program lenders have targeted service areas, such as Syracuse, New York City or the North Country. The governor’s office said more lenders are expected to join the program.
Program lenders are the primary point of contact for borrowers, and each have their own loan application process and loan products. Interest rates, terms and fees are determined by the individual program lenders. Lenders are responsible for applications and credit decisions.
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