Governor Paterson Announces Enhancements to New York's Small Business Lending Programs
March 20, 2009
Governor David A. Paterson today announced the expansion of funding a critical economic development lending program aimed at the Small Business community. In response to the current economic climate and in support of the integral role that small business plays in the continuity and strength of our State’s economy, Governor Paterson directed Empire State Development (ESD) to increase funding to the Community Development Financial Institutions (CDFI) program by $2.5 million and authorized an $80,000 grant to the Regional Alliance of Small Contractors. Today’s announcement follows President Obama’s vow earlier this week to ease the financial burden of the nation’s small businesses through immediate action to revive frozen credit markets.
“Our prosperity depends upon the success of America’s small businesses and entrepreneurs. It is with this in mind that New York State is pleased to take aggressive action, along with the Administration, on their behalf,” said Governor Paterson. “Small businesses are the heart of the American economy, responsible for half of all private sector jobs and creator of about 70 percent of all new jobs over the past decade. At no time are those businesses suffering more than they are now, and New York must do what it can to help protect their future.”
ESD President & CEO Marisa Lago said: “ESD is extremely pleased to lend much-needed assistance to New York’s small business community, particularly at such a critical juncture for our State and national economies. With the expansion of our community development finance initiative, we hope to encourage the continuous operation and growth of small businesses in order to sustain their economic standing through these difficult fiscal times.”
ESD will implement the following enhancements. These efforts will help small businesses respond to the challenges posed by the current economic downturn as well as position them for future growth and success:
- Expand the Community Development Financial Institutions (CDFI) program to provide additional resources to small businesses. ESD will provide an additional $2.5 million to fund this program in 2009, which represents a nearly 170 percent increase over the previous funding level of $1.5 million, raising the funds available to a total of $4 million. Half of this new funding will be targeted towards businesses owned by women and minorities. This year’s budget allows for $1.5 million, which will help fund ESD’s traditionally MWBE-focused CDFI Program. In order to support small business throughout the State in this critical time, ESD will be increasing the funding to the MWBE CDFI Program to $2 million total, and will additionally be offering $2 million to support CDFI’s lending to all small and micro businesses. A Request for Proposals for the entire $4 million is expected to be released in April.
- Authorize an $80,000 grant to the Regional Alliance of Small Contractors (RASC), which will enable the organization to expand its offerings and train additional small minority and women contracting businesses. RASC will use the $80,000 ESDC grant to train 240 to 280 small minority and women business owners in the areas of blueprint reading, estimating, contract law and administration, project scheduling and courses in Quickbook, Occupational Safety and Health Administration “OSHA”, Leadership In Energy and Environmental Design “LEED”, and the development of business plans as well as facilitating access to financing, bonding and insurance. This will increase the businesses’ access to private and government contracts by providing them with the tools they need to more successfully bid on contracts.
- ESD will also make the Contract Reporter available this year free to New York State libraries, Small Business Development Centers, Entrepreneurial Assistance Program (EAP) centers and small businesses employing ten or fewer workers. The current subscription rate is $99 a year. This publication is an important tool for businesses wishing to bid on State Contracts. Beginning in 2010, basic access to the Contract Reporter will be free to all users and will also be published daily (as per legislation passed in 2008).
In addition to funding available through ESD, Governor Paterson also reminded all small business owners about the important role regional and community banks continue to play in providing access to much needed credit. President Obama’s new plan includes purchasing up to $15 billion of Small Business Administration (SBA) loans through the Troubled Asset Relief Program (TARP) Program, temporarily raising guarantees to up to 90 percent in SBA’s loan program, and temporarily eliminating certain SBA loan fees. These actions will make it easier for small businesses to access credit through their community and regional banks in New York.