Governor Andrew M. Cuomo today announced that Empire State Development (ESD) has partnered with MTA and Carver Federal Savings Bank to help expand the Small Business Mentoring Program and improve small businesses ability to access loan capital in New York. ESDs contribution will enable Carver Bank to increase both lending opportunities and the size of loans, which can now be as much as $900,000. Previously, the loans, which are issued by Carver Federal Savings Bank, had been capped at $150,000.
This partnership among ESD, MTA and Carver Federal Savings Bank will boost our efforts to increase the participation of MWBEs and small businesses in state contracting, Governor Cuomo said. By easing access to loan capital and providing mentorship opportunities, small businesses and MWBEs will have a greater chance at growing and succeeding, leading to more jobs and revenue to benefit the whole state. We are pleased to offer this expanded program and welcome interested companies to apply.
The mentoring program is aimed at expanding the pool of companies that can compete for MTA construction contracts by providing assistance to local minority-owned, women-owned and/or disadvantaged firms. It provides mentoring services, training, surety bonding services, and a critical element of the program access to capital for businesses that can face challenges using traditional funding sources.
In addition, this program is just one of the many initiatives that will be discussed next week at the States third annual MWBE Forum in Albany, October 3-4. For more information on the Forum, go to http://www.governor.ny.gov/press/09092013-third-annual-mwbe-forum.
Lack of access to start-up capital is probably the most significant barrier preventing small firms from doing business with us, said Thomas F. Prendergast, Chairman and CEO of the MTA. The more generous lending terms made possible by the States support will not only help local small businesses to grow and create jobs, but it will mean a more competitive environment for the MTA when we put contracts out to bid. More competition directly benefits our bottom line.
I want to commend all who have made the Small Business Mentoring Program a success, Prendergast continued. The actions by Carver and Empire State Development are a huge ratification of the vision and implementation of this program to date. I want to thank the MTAs partners at Carver and at Empire State Development for making this a reality.
Access to capital is absolutely critical to a small business ability to grow and succeed in New York State. The MTA and Carver Bank have helped a number of small businesses and MWBEs by providing assistance through the Small Business Mentoring Program, and we are proud to join the team with our support, said Empire State Development President, CEO & Commissioner Kenneth Adams. By strengthening this program, we are expanding opportunities for smaller firms and increasing competition for State contracts which is good for business and great for New Yorkers. I commend the MTA and Carver Bank for developing such a successful program and look forward to the continued commitment to helping our businesses thrive in the Empire State.
Participating businesses are eligible to receive loans from Carver Federal Savings Bank, a Harlem-based bank that was selected through a competitive bidding process to be the lending institution for the Small Business Mentoring Program.
Deborah C. Wright, Chairman & CEO of Carver, said, Carver is enthusiastic to be the lead lending institution for the MTA Small Business Mentoring Program. We stand behind the program mission to provide both technical assistance and much needed capital to local minority-owned, women-owned, and disadvantaged firms. Carver looks forward to seeing the unique entrepreneurs that result from the combined efforts of this exciting program.
Under the terms of a new agreement, Empire State Development will establish a $480,000 loan loss reserve to support the Small Business Mentoring Program and improve NYS certified MWBEs access to much needed loan capital. Additionally, ESDs support will help ease Carver Banks exposure to loan defaults and enhance Carver Banks ability to make additional loans, strengthening the banks participation in the program. The MTA, Carver Bank, and ESD will support qualified emerging contractors by providing them the capital access they need to complete projects successfully. ESD involvement, along with private Carver Bank capital, will give these small MWBE firms an opportunity to bid and win participation on MTA capital improvement projects.