Governor David A. Paterson and Empire State Development (ESD) today announced allocations from the State's new Small Business Revolving Loan Fund to community development financial institutions and other community-based lending organizations statewide. The Small Business Revolving Loan Fund is targeted to 'Main Street,' everyday businesses and will provide $50 million in loans to small businesses across New York State over the next two years.
"The funding allocations announced today are a major step in easing the small business capital crisis and promoting the growth and development of small businesses in New York," Governor Paterson said. "As small businesses typically create the most new jobs after a recession, today's announcement is critical to the recovery of our economy. I thank the Small Business Task Force and Empire State Development, who were instrumental in developing this important new fund. This program will provide the critical capital necessary to help businesses retain employees, create new jobs, and help grow our State economy."
This past July, Governor Paterson announced the creation of the Small Business Revolving Loan Fund. The $25 million in State allocations released today in combination with $25 million in additional private matching funds from the selected lending institutions, will provide a total of $50 million in additional capital to minority and women-owned enterprises and other small businesses that are having difficulty accessing traditional credit markets.
Empire State Development Chairman & CEO Dennis M. Mullen said: "All across New York – from my home in Rochester to New York City – small firms make an enormous contribution to their communities. The funding awards announced today will be used to provide new capital to those small firms, helping them to buy inventory or equipment, create jobs, or lower their costs by refinancing high-interest debt. Small businesses all across the State continue to face challenges, but we are improving the business climate everyday. In the past two years, we have doubled grant support for alternative small business lenders, expanded our network of small business technical assistance centers, and created New York First, a groundbreaking business portal containing an expanded Small Business Resource Center and information on the State's 140 small business programs and services. All of these resources support the entrepreneurs that will lead our economic recovery. I commend Governor Paterson, the Small Business Task Force and my own staff here at Empire State Development for all their efforts."
Over the past four years, bank small business lending under $250,000 has decreased by 60 percent in number of loans and 48 percent in dollar terms. The Small Business Revolving Loan Fund will provide low-interest loan capital to alternative lenders – community development financial institutions, credit unions, and small business lending consortia – to address the small business credit crisis and get millions of dollars into the hands of small businesses quickly. These alternative lenders have a history of serving businesses experiencing difficulty accessing traditional credit markets; they offer more flexible underwriting and often provide other technical assistance to help businesses stabilize and grow.
The allocations made today will support microlending of $25,000 and below, as well as larger small business lending of up to $250,000 or above. The program will support additional small business lending in every region of the State.
The 20 organizations who received awards today through the Small Business Revolving Loan Fund include:
All participating lending organizations are required to submit regular reports and will be monitored by Empire State Development to ensure high performance and aggressive lending activity.
Governor Paterson created the Small Business Task Force in July 2009, in an effort to develop new strategies to promote the growth and development in New York and within six months the Task Force submitted its Final Report to the Governor. The report included proposals to address increasing access to capital; reducing red tape and providing regulatory reform; strengthening and enhancing training and technical assistance for business owners, employees and aspiring entrepreneurs; and improving access to, and awareness of, available State resources. Since then, New York State has either completed or made substantial progress on more than two-thirds of the Task Force's recommendations.
For more information on the State's Small Business Division and its programs, please visit: http://www.esd.ny.gov/SmallBusiness.html.
Empire State Development is New York's chief economic development agency and administrator of the statewide business resource portal New York First (www.NYfirst.NY.gov). ESD is committed to being recognized on a global scale as the economic development engine driving job growth, strategic investment and prosperity in New York State. ESD is intent on paving the way for New York State to become the leader of the innovation economy and one of the most business friendly, productive and competitive economic development climates in the world. ESD also oversees the marketing of "I LOVE NY," the State's iconic tourism brand. For more information on Empire State Development, visit www.esd.ny.gov.
The following statements were provided in support of the Small Business Revolving Loan Fund allocations:
F. Michael Tucker, President and CEO of the Center for Economic Growth, said: "At the recommendation of the Small Business Task Force, Governor Paterson created the Small Business Revolving Loan fund to address the needs of the small business community and promote its growth and development. Today's announcement is concrete evidence that a government can take a good idea and implement it in a timely fashion to leverage private investment to grow our economy and create jobs. I commend the Governor and Empire State Development for their leadership in continuing to develop economic development initiatives even in these tough economic times."
Michael Elmendorf, State Director of the National Federation of Independent Business in New York, said: "It is no secret that New York's small businesses have felt the enormous credit crunch and limited access to credit during this period of recession. NFIB applauds this important step in recognizing the importance of small business in job creation and to the growth of New York's economy. The Small Business Revolving Loan Fund will help to ease the credit burden for small businesses. These low interest loans will not only help the State's small businesses grow, but keep their doors open."
Melanie Stern, Coordinator of the New York State Coalition of Community Development Financial Institutions, said: "With today's announcement, New York State has once again demonstrated its leadership in creating jobs and economic opportunity. By providing low cost capital to Community Development Credit Unions and Non-Profit Loan Funds, the State is helping to insure that small businesses can continue to be an engine of recovery and growth in communities where it is most needed."