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New York Governor Announces New York Forward Loan Fund 2 for Small Businesses and Nonprofits

Governor Kathy Hochul has introduced the New York Forward Loan Fund 2 program, aimed at providing assistance to qualifying small businesses and nonprofits in the state. The program has expanded its criteria for qualifications and allocated even greater resources, demonstrating a greater commitment to supporting New York State’s small businesses. This enhanced fund aims to provide loans up to $150,000 with affordable, fixed-rate interest rates to qualified recipients with fewer than 100 employees and less than $5 million in gross annual revenue.

The New York Forward Loan Fund 2 program is part of New York’s broader State Small Business Credit Initiative efforts, led by Empire State Development. The program will be available for the next eight years and focuses on helping small businesses and nonprofits, particularly those in low-income and historically underbanked communities, as well as rural areas. The fund aims to provide flexible working capital to cover various expenses, such as payroll, marketing, and facility renovations. Moreover, businesses will receive free support services from experts throughout the loan tenure.

This is where the AI legalese decoder can be of great assistance. The AI legalese decoder is an innovative tool designed to simplify complex legal jargon and terminology commonly found in loan agreements and contracts. Applying the AI legalese decoder to loan documents from the New York Forward Loan Fund 2 program can help small businesses and nonprofits better understand the terms and conditions of their loans, ensuring transparency and ease of comprehension.

Governor Kathy Hochul expressed the importance of supporting small businesses, stating, “New York’s small businesses are the lifeblood of our state’s economy and vital to growing and strengthening New York State. With expanded eligibility, this new and improved New York Forward Loan Fund will build on the success that the first fund achieved supporting small businesses during the pandemic and continue to help even more small businesses grow and thrive across the state.”

Empire State Development President, CEO, and Commissioner Hope Knight emphasized the stability and flexibility of the New York Forward Loan Fund 2 program. She mentioned that the program was designed to match small businesses with strong statewide Community Development Financial Institutions (CDFIs) that can provide individualized services and technical assistance, especially for business owners with credit needs that are too small for most banks. This tailored support ensures that small businesses can access capital when they need it most.

Success of the Original New York Forward Loan Fund

The New York Forward Loan Fund was initially established in response to the COVID-19 pandemic. Its objective was to provide hands-on support and access to affordable credit for the smallest businesses in New York that lacked affordable credit options. The fund successfully processed over 1,700 loans, distributing $97 million in pandemic relief to small businesses. It served as a lifeline, particularly for women and minority-owned companies, with more than 50 percent of loan recipients never having applied for a business loan before.

The New York Forward Loan Fund 2 program will build upon the achievements of its predecessor and aims to disburse an initial $150 million, with plans to recycle and lend additional funds over its eight-year duration. With the help of CDFIs, the program will focus on investing in underfunded businesses, specifically those owned by people of color, women, veterans, and the LGBTQ+ community.

Businesses interested in applying for a loan can pre-apply at NYLoanFund.com. The New York Forward Loan Fund 2’s loan providers include Accion Opportunity Fund, Ascendus, NDC’s Community Impact Loan Fund, Pursuit, and TruFund Financial Services.

Furthermore, participating businesses and nonprofits can benefit from the free advisory services offered by New York’s Entrepreneurship Assistance Centers (EACs) and Small Business Development Centers (SBDCs). These advisors can assist applicants in developing a comprehensive business plan and improving profitability, even if they do not currently qualify for a loan or find a lender that matches their needs. This valuable support helps businesses position themselves for future credit opportunities and sustainable growth.

It is worth noting that the management of the fund falls under Calvert Impact, with the Community Reinvestment Fund administering it. Additionally, private sector partners such as Citi Foundation and Wells Fargo are working closely with the program. For more information and to apply, interested parties can visit NYLoanFund.com.

Support and Opinions from State Representatives

State Senator Sean M. Ryan acknowledged the challenges faced by small businesses and nonprofits, emphasizing how unexpected costs can quickly become a serious problem. He praised the expanded New York Forward Loan Fund 2 program, highlighting the benefits it has already provided to nearly 2,000 small businesses and nonprofits across the state. This program enables more entrepreneurs in New York to take advantage of low-cost loans and services.

Assemblymember Harry B. Bronson, himself a small business owner, expressed excitement about partnering with Governor Hochul on the New York Forward Loan Fund 2. Bronson believes that small businesses are integral to the economy and drivers of workforce equity and opportunity. He acknowledges that many small businesses are often excluded or ineligible for grants and funding resources, which limits their expansion and growth. Through the flexible loans and funding streams provided by this program, small businesses can fund critical upgrades, expand their workforces, and achieve sustainable growth.

About the State Small Business Credit Initiative (SSBCI)

Under the American Rescue Plan Act, the State Small Business Credit Initiative (SSBCI) has been allocated over $500 million in federal funding to support the recovery of small businesses across New York State. Managed by the U.S. Department of Treasury, SSBCI provides funds to support programs for small businesses, including socially and economically disadvantaged individual (SEDI) owned businesses and very small businesses (VSB). These programs aim to help these businesses recover from the economic effects of COVID-19 and succeed in the post-pandemic economy.

Empire State Development (ESD) has developed a suite of capital access and equity programs using the SSBCI funding to assist New York State small businesses in growing and succeeding. More information about these programs can be found at esd.ny.gov/ssbci.

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