Empire State Development (ESD), the umbrella organization for the New York State Urban Development Corp. and the New York Job Development Authority, has provided $1 million to Elmsford-based nonprofit Community Capital New York (CCNY), which will lend it to small businesses in economically distressed areas in Westchester.
The $1 million for Westchester is part of a $4 million allotment from ESD’s Metropolitan Economic Revitalization Fund being split among Westchester, Rockland and Nassau counties.
“It is directed to communities where there are unmet capital needs,” Community Capital New York’s President and CEO, Kimberlie A. Jacobs, told the Business Journal. She said the target area is south of Interstate 287 and includes White Plains, Yonkers, Mount Vernon and New Rochelle as key communities.
“This is really the first funding we’ve had that’s targeted specifically at addressing needs in southern Westchester. We will continue to do lending in northern Westchester and the other six counties that we serve, but we will do that with other funds,” she said. The other counties served by Community Capital are Rockland, Putnam, Dutchess, Orange, Sullivan and Ulster.
Jacobs explained that the money is in a revolving fund, so that as loans are paid down the money will be loaned out again.
“The average small business loan in our portfolio right now runs 48 months. Obviously, we’re not going to be able to put the full million out on day one, but if it took six months or even 12 months, then hopefully every five years you’d have the fund completely turn over and be available to the next batch of businesses, the new crop,” she said.
The interest rate on a loan likely would be 8.5 percent, according to Jacobs. If during an initial consultation it seems that a business could qualify for a loan from a traditional bank, Community Capital would encourage the business to go that route since the interest might be a bit lower.
“For startup businesses in particular and for some existing businesses, they’re just not a good fit for bank lenders right now, and that’s really our target market, to help those folks get their foot in the door, start to build a track record for their business and in a short initial conversation we can figure that out,” Jacobs told the Business Journal.
The Westchester County Office of Economic Development worked with the state and Community Capital in setting up the program.
Bridget Gibbons, director of that office, said, “Small businesses are the backbone of our county’s economy and access to capital is critical to ensure their economic success.”
County Executive George Latimer said, “It is vitally important that we continue to encourage the growth of small businesses through loan programs such as these which target economically distressed areas.”
Jacobs said that Community Capital is concerned “about a lot of small businesses that don’t know where to turn and so they look online for a small business lender and a lot of those folks charge really incredibly high rates of interest and have unfavorable repayment terms.”
Jacobs explained that the Empire State Development-funded loans can be used for a variety of startup or expansion purposes. “Some portion of the loan might be used for working capital, maybe you need a new piece of equipment, maybe you want to make some leasehold improvements, maybe you had great news and you just got a big order and you need to ramp up to address that. Energy improvements are eligible expenses; refinancing of existing business debt is an eligible expense.”
Finding out more is easy, Jacobs said. “Give us a call and we’ll have a brief conversation with you and make sure it sounds like we’re the best fit for your small business.”
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