New York state launched the new Bridge
to Success loan program, available through
participating lenders committing at least $20
million to expand access to short-term bridge
loans for minority and women-owned business
enterprises (MWBEs).
The program will provide qualified MWBEs
with the short-term resources to participate
in up to $1 billion in contracting opportunities
with New York state, officials said.
“Small businesses are the engine of New
York’s economy, but because of their size they
have a harder time getting the capital they
need to compete for state contracts,” Gov.
Andrews Cuomo said.
“To encourage their full participation in rebuilding our economy, the Bridge to Success program will help more small businesses access short-term loans so they can do business with New York’s agencies and authorities. Supporting MWBEs is one more way we’re expanding economic opportunity for all New Yorkers.”
Empire State Development (ESD) is providing $2.73 million under the program in loan loss reserves to five participating lenders who will make $20 million available in much needed, short-term, working capital loans to qualifying MWBEs. Officials said ESD’s support stimulates increased lending in this area and enables participating lenders to mitigate risk.
Empire State Development President CEO and Commissioner Kenneth Adams said by partnering with high-capacity lenders around the state, ESD is “dramatically increasing the lending opportunities for MWBEs looking to work with the state. Many banks are reluctant to provide credit to these firms given the short term nature of their capital need and the size and experience of many of these companies, despite a good idea or track record. The Bridge to Success program levels the playing field and opens the door for businesses that face challenges using traditional funding sources.”
The following participating lenders provide loan coverage:
• New York Business Development Corp. (NYBDC) – statewide
• State Employees Federal Credit Union (SEFCU) – parts of the Capital Region, Southern Tier, Central New York, Mohawk Valley, Finger Lakes and Western New York Regions
• Tompkins Mahopac Bank – Mid-Hudson Region.
• TruFund Financial Services (TruFund) – Mid-Hudson, Long Island and New York City Regions.
• Carver Federal Savings Bank – New York City Region.
According to state officials, loans made under the program will typically be under $200,000 with terms under two years. Funds will provide qualified MWBEs the bridge capital they need to hire staff, buy materials, or purchase equipment, giving them a better chance to secure and perform on the up to $1 billion that is currently available in state contracting opportunities.
New York Business Development Corp. President and CEO Patrick J. MacKrell said, his group “is pleased to participate as a Bridge to Success lender … Since 1955, NYBDC has maintained its focus on access to capital for New York’s small businesses; this additional tool will allow us to serve a broader array of needs. The formula is simple– access to capital for small business expands opportunity while opportunity promotes prosperity, confidence and sustainable growth in our economy. We look forward to supporting businesses statewide.”
SEFCU President & CEO Michael J. Castellana said the program “will provide small businesses and entrepreneurs–specifically those that are owned by women and minorities–the opportunity to compete for and execute state contracts by providing the working capital they need. We believe by providing these young companies, as well as seasoned ones, the necessary cash flow, they can compete and expand their business, boosting the economic vitality of our region.”
The Bridge to Success Program complements the New York State Surety Bond Assistance Program, which provides training and financial support to help MWBEs and other small businesses access the surety bonding necessary to bid and perform on State construction contracts. Over $40 million in surety bonding has been secured by small firms to date through the New York State Surety Bond Assistance Program.
Officials said these efforts to engage entrepreneurs and provide opportunities in a concise way have helped raise the contract utilization rate for MWBEs in the state beyond the 20 percent goal that Cuomo set when the state utilization rate by MWBEs stood at 9 percent.