Home Banking & Finance Alternative lender gives small businesses a shot at success

Alternative lender gives small businesses a shot at success

In searching for loans, Dakota Catucci and Frank Vazquez, two Westchester-based entrepreneurs in their 20s, were rejected by banks left and right.

Although their family and friends were financially supportive of their dream to start a retail business featuring hockey equipment as well as providing a sharpening service for ice skates in Yorktown Heights, they still didn’t have enough capital.

For Carla Commisso and Shaina Rotstein, two speech language therapists with 10 years of experience, getting a loan was also a struggle. They needed capital to cover the costs of renovating space in Mount Kisco where they envisioned setting up their own speech and language therapy center.

In both cases, Community Capital New York (CCNY), a Hawthorne-based not-for-profit alternative lender, stepped in to provide them with the resources and support to start their businesses. A Community Development Financial Institution, CCNY has been lending to business clients in Westchester, Putnam, Duchess, Rockland, Orange and Ulster counties since 2003, filling a gap in the marketplace for small businesses that have difficulty securing loans.

Fifty percent of its loans stay within the community to help struggling businesses get on their feet, said Kimberlie Jacobs, executive director at Community Capital.

Building on nothing but some collateral, good faith and a solid business plan, Community Capital New York doesn’t look for businesses with a perfect credit score. In fact, 55 percent of its loans go to startup business owners who don’t have a track record at all. The majority of its loans support the restaurant and food industries, service industries and small construction and manufacturing companies, Jacobs said.

CCNY borrows money through the Small Business Administration and receives grants from the federal and state governments. Community Capital relends the loans to businesses and pays them off.

CCNY draws most of its technical resources from the communities it serves. Volunteers from Westchester SCORE, which provides advisory and small business mentoring services, and professionals with a background in business and finance all provide resources that help small business owners develop a business plan and receive training to operate a business.

“We provide QuickBooks training, which is an accounting software program that helps people set up their books in a nice simple straightforward system, so they can build their financial management skills,” said Jacobs. “We do webinars on what you should look for in a lease and provide guidelines on employment loans and marketing. We give people a place to go that they trust, and we’re working towards making their business a success.”

Recently, CCNY launched an online application form that allows more businesses to quickly and efficiently apply for loans. After applying online, Catucci and Vazquez were called into a loan committee meeting, where CCNY and members of the community evaluated their business plan. The owners agreed their chances of getting a loan were better than other startups because they had multiple streams of revenue from selling and reselling hockey gear to providing repair services.

After receiving a $50,000 loan from CCNY, Catucci and Vazquez bought equipment that allows them to shape and sharpen blades using state-of-the-art technology. They said these tools are two critical investments to their business. The company plans to grow their services by adding a screen- printing component to their business and providing hockey lessons to youngsters at neighboring ice rinks. The two men plan to open Hudson Valley Hockey Co. at 250 Mahopac Ave. in Yorktown Heights by early February.

Meanwhile, Commisso and Rotstein’s main hurdle was finding money to build out a new space. After getting loan rejections at several banks, the co-owners realized no bank was willing to lend to a business with no collateral or credit history. But once they found out about CCNY, they applied for a loan and instantly received guidance through the process of creating a business plan that was later approved by the nonprofit’s loan committee.

“If you ever saw the show ‘Shark Tank,’ it was very much like that,” Rotstein said. “We entered a room and a group of people asked us how we plan on staying open and making a profit and what our business needed both long-term and short-term, and they made sure we could be stable and that we can pay them back.”

The co-owners received a $50,000 loan from CCNY last spring to revamp their 1,800-square-foot space at 40 Smith St. in Mount Kisco. By the end of the summer, Talk of the Town Speech and Language Therapy P.L.L.C. was open for business, and the loan had fully covered the cost of construction and helped furnish the space with equipment used during the therapy sessions.

Since then, they’ve worked with 22 children for a total of 52 weekly sessions at their learning center, which includes a play area, kitchen and bedroom space to give children a comfortable space to learn new words and improve their speech and language skills. The owners are taking on a full workload, but they insist on expanding their business.

“We just signed a lease for the space upstairs,” Commisso said. “We won’t be expanding for another year, but we’re doing renovations. We’re profitable, so we can use our own money to hire more therapists and have office space for up to four new employees.”

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