In his latest effort to revive the city’s economy post-pandemic, Mayor Eric Adams unveiled on Monday a new $75 million public/private small business loan fund to help boost mom-and-pop operations that have traditionally struggled to get assistance.
Dubbed the “NYC Small Business Opportunity Fund,” the public-private partnership brings together the city’s Department of Small Business Services (SBS) with Goldman Sachs, MasterCard and eight community development financial institutions (CDFIs), SBS Commissioner Kevin Kim said during a news conference announcing the new initiative in the Bronx on Jan. 23.
The program will dole out loans ranging from $2,000 to $250,000 for more than an estimated 1,500 small businesses at a 4% fixed interest rate, which Kim said is “unbeatable in this economy” where interest rates have skyrocketed in recent months. Small businesses can use the loans to refinance existing debt, hire new employees or draw in more customers, while start ups would only have to pay interest for the first six months of the loan.
Goldman Sachs will pick most of the tab, roughly $50 million, Kim said, while the city will cover the remaining $25 million.
Adams said many women and minority-owned small businesses didn’t close during the pandemic and the city is indebted to them for that sacrifice.
“They did not go away from the needs of the city, providing those basic needs,” the mayor said. “You cannot telework if you are delivering food products, health care products, and some of the other basic supplies. They remained open and we are forever in debt to them. Today, we are doing a down payment on that debt with $75 million to small businesses.”
Applications for the program opened online Monday and small business owners can learn more about it by calling an SBS hotline at 888-SBS-4NYC.
Kim said the program will be accessible to businesses who’ve been left out of other loan programs because there’s no minimum required credit score or number of years in business and there’s no application fee.
“Regardless of your credit score, there is no minimum credit score, or years in business, whether you’re a freelancer or employ several workers, if you need to boost to hire more people, invest in your equipment, grow your operations, or even pay down existing high interest debt, that’s what this money can be used for,” Kim said.
CDFIs will offer one-on-one assistance, plus no-cost financial counseling, to businesses applying for a loan through the program. Some of the CDFIs involved in the loan fund include Ascendus, Accompany Capital and BOC Capital.
Asahi Pompey, global head of corporate engagement at Goldman Sachs, said one of the biggest challenges facing small businesses, particularly those operated by people of color, is obtaining loans. She said data the investment bank gathered from over 15 surveys of small business owners across the country for last year showed that close to 50% of Black-owned small businesses planned to take out a loan but only 19% were confident they’d be able to get one.
“So what does that mean?” Pompey asked. “Need high, confidence low. That’s what we’re here to address today.”
“What are the kinds of opportunity gaps that $75 million in affordable, flexible capital, what can that do for small businesses in New York City?” she added. “Imagine this: a relatively new accounting business in the Bronx that can finally take on those three new clients, because they’re able to get that top-of-the-line software they’ve been meaning to get.”