More Loans for M/WBEs

TD has committed $10 million to a NYC loan fund for small businesses and M/WBEs. (Photo by Mike Mozart, Creative commons license)

NYC Mayor Bill de Blasio on Feb. 9 announced another step in the city’s efforts to promote minority and women-owned business enterprises (M/WBEs). The size of two loan funds established by the city is being tripled, de Blasio said, with $40 million in affordable loans being promised by the city’s three designated banks: Amalgamated Bank, Bank of America and TD Bank. The total pool of revolving loan funding of $60 million that will be available to M/WBEs and small businesses should help them overcome barriers to becoming city contractors.

The city’s objectives is that by the end of fiscal year 2021, 30 percent of the value of city contracts be awarded to M/WBEs.

“Small business owners face a multitude of challenges daily. Contracting with the city should not be one of them,” said Gregg Bishop, commissioner of the Department of Small Business Services. “The Contract Financing Loan has already provided crucial financial support to small businesses, including M/WBEs, and the commitments announced today will help even more businesses position themselves for success.”

Amalgamated will be allocating $20 million to the city’s Emerging Developer Loan Fund, while Bank of America and TD Bank will be allocating $10 million each toward the Contract Financing Loan Fund.

Deputy Mayor for Housing and Economic Development Alicia Glen noted that the loan funds will provide M/WBEs with the crucial support they need to be able to take on bigger city projects. “To combat this affordable housing crisis, we are building a deeper bench of women and minority owned business and development teams,” she noted.

The Contract Financing Loan Fund, launched last year, is administered by SBS and provides businesses with access to $500,000 in loans at a low three-percent interest rate. The Emerging Developer Loan Fund, administered by the New York City Economic Development Corporation, has since 2016 provided low-interest loans that range from $100,000 to $2.5 million. The city estimates that with the additional funds, the CFLC will be able to “assist emerging developers with 40 new loans that will create $150 million in potential development opportunities, creating an estimated 6,000 jobs over a five-year period.”

The expanded loan programs come on the heels of a change in state law which increased the city’s discretionary spending limit for M/WBEs to $150,000 for M/WBEs that offer the city goods or services, up from $20,000 before the law’s enactment. This increased discretionary spending limit closely matches the state’s $200,000 limit in this area.

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