Funding From U.S. Treasury Department's State Small Business Credit Initiative Will Support Businesses Recovering from Economic Impacts of COVID-19 Pandemic
Includes Funding for Minority and Women Owned Small Businesses
Governor Kathy Hochul today announced New York State has been awarded $501.5 million in federal funds through the State Small Business Credit 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 State. I thank President Biden, Secretary Yellen, Senator Schumer, Senator Gillibrand and Democrats in the New York Congressional delegation for their leadership on the American Rescue Plan and look forward to continuing to work together as we move the Empire State's economy forward."
Secretary of the Treasury Janet L. Yellen said, "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."
U.S. Senate Majority Leader Charles E. Schumer said, "This historic $500 million federal investment is the shot in the arm New York's small businesses need to recover from the pandemic and rebuild our local economies. 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. As majority leader, I fought to secure the State Small Business Credit Initiative federal investment as part of the American Rescue Plan to meet the unprecedented challenges faced by the nation's small businesses during the pandemic and I am proud to now deliver this federal funding for New York to build up the state's small businesses and manufacturing base to accelerate our recovery, and drive our economy into the future."
Senator Kirsten Gillibrand said, "I am so proud to have helped secure this historic federal funding for SSBCI in the American Rescue Plan. This funding will provide critical resources and increase access to capital for our state's small business owners. Fighting for New York's small businesses means fighting for a bright future and economic prosperity in our state."
Representative Carolyn Maloney said, "Small businesses are the lifeblood of New York City, but unfortunately, they bore the brunt of the COVID-19 crisis. I am thrilled that Congress could deliver the American Rescue Plan, which helped so many individuals and small businesses who were struggling throughout the City and State. Today, is a critical step in getting the funding from ARP into the pockets of those who need it most as The White House formally approves New York State's $501 million small business funding plan under the American Rescue's Plan's State Small Business Credit Initiative (SSBCI). I commend Governor Hochul for working swiftly with the President so that our small businesses in need can keep their doors open."
Representative Gregory Meeks said, "Small businesses are the backbone of our economy. Governor Hochul's planned use of American Rescue Plan SSBCI funds recognizes the integral role small businesses play in their community's economic development in the post-pandemic economy. This will provide the necessary resources and support, especially for minority and women owned business, to overcome structural and institutional challenges to their continued growth."
Empire State Development President, CEO and Commissioner Hope Knight said, "New York was among the hardest hit by the devastating effects of COVID-19, and many of our state's small businesses are still trying to recover. SSBCI funding will go a long way to help these businesses, particularly those who face historic disadvantages, like MWBEs. Through a mix of programs designed with businesses' needs in mind, ESD will ensure this critical support gets to those who deserve it most."
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.
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