Contact: : Sunny Mindel/Curt Ritter 212-788-2958
Bernadette O'Leary 212-312-3523 (EDC)
Mayor Rudolph W. Giuliani announced today that the New York City Economic Development Corporation (EDC) has expanded and improved the New York City Capital Access Program established to help small businesses that might not meet conventional lending criteria. The program helps businesses raise working capital, acquire property, renovate facilities and purchase equipment and inventory.
Under the program, EDC and the borrower or lender each put a percentage of the loan into a reserve fund. The reserve fund provides a cushion that enables lending institutions to grant loans to businesses that might not otherwise qualify. As the reserve fund grows, the lenders are able to make more loans to more of these businesses.
"The Capital Access Program has already achieved an enviable record of success. Since its inception in 1993, it has granted 247 loans for a total of more than $13 million to companies with more than 2,100 employees," said Mayor Giuliani. "These improvements will help us to assist even more small businesses."
Improvements to the program include:
¨ Community Development Credit Unions, in addition to commercial banks, will now be allowed to participate. This will permit more small businesses to take advantage of the program, especially those located in financially-underserved neighborhoods where these credit unions typically operate.
¨ For businesses located in low to moderate income neighborhoods, the fee structure has been lowered.
¨ Capital access loans can now be used to refinance existing debt. This feature will be attractive to many start-up businesses that may have had to finance initial capital costs with high-interest loans.