NYS gets $500M for small businesses

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New York State was awarded $500 million to support small businesses. The funding is through the American Rescue Plan.

Those federal funds came through the state’s Small Business Credit Initiative, which was reauthrorized and expanded as part of the ARA. The initiative provides funds to support programs for small businesses. It includes a focus on businesses that are still grappling with COVID’s economic impact. And it is aims to help traditionally disadvantaged small businesses succeed in a post-pandemic economy.

“Far too many small business owners are still feeling the economic toll of the pandemic,” Gov. Kathy Hochul said in a statement. “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.”

Through Empire State Development, the state is setting up programs that would match federal support to the critical needs of the state’s small businesses. This programming includes both new initiatives and the expansion of existing programs. It focuses on capital access, loan guarantees, loan participation programs, collateral support, venture capital for fund managers and start-ups and technical assistance.

“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,” Empire State Development President, CEO and Commissioner Hope Knight said in a statement.

“SSBCI funding will go a long way to help these businesses, particularly those who face historic disadvantages,” including minority and women-owned businesses,” Knight added. “Through a mix of programs designed with businesses’ needs in mind, ESD will ensure this critical support gets to those who deserve it most.”

Capital Access Program:

A proposed $29.4 million capital access program would expand an existing program and provide portfolio insurance to lenders that make loans to small businesses to incentivize the expansion of loaning to these entities.

Affordable Debt Programs

A new $106.1 million capital loan fund would provide long-term capital investments via debt instruments and credit structures. The eligible uses for these capital loans are highly flexible, with a focus on providing capital support to socially and economically disadvantaged businesses.

A $55.5 million small business revolving loan fund would expand an existing program. This fund would address inequitable capital access, to address gaps facing new companies, underbanked communities, small businesses which are more likely to be minority-owned.

A $47 million New York Forward Loan Fund would serve as an expansion of an existing loan program. This program is funded with investors pooled capital, to make flexible, low-interest loans to small businesses and nonprofit organizations, through participating Community Development Financial Institution lenders.

A $22 million bonding guarantee program, an expansion of an existing program, would  provide surety bonding to reduce risks associated with bonding for small businesses.

A new $22 million contractor financing revolving loan fund would provide needed funding to contractors in need of matching dollars to secure federal, state, and local contracts.

Equitable Venture investments

A new $102 million emerging and regional partner program fund would support the growth and establishment of diverse, emerging, and regional private sector fund managers.

A new $52 million community and regional partner program fund would provide selected accelerators with funds to be leveraged with private dollars to invest in New York State start-up companies.

Working with angel groups and pre-seed investors across the state, ESD would through a new $30 million pre-seed and seed matching fund program continue to support high growth start-up companies at the earliest stages of their growth and development.

A $35 million innovation venture capital fund would serve to expand an existing program. ESD said that since 2015 it 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.

Empire State Development is now 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.