Mayor Bill de Blasio has announced that three of the City’s designated banks – Amalgamated, Bank of America, and TD Bank – have committed $40 million towards two of the City’s three programs that help minority and women-owned business enterprises (M/WBEs) and small businesses’ access to affordable loans in order to grow and sustain these businesses.
The loan programs, known as the Contract Financing Loan Fund (CFLF) and the Emerging Developer Loan Fund (EDLF), are two financial tools established by the de Blasio Administration to address historic barriers faced by many M/WBEs and small businesses in accessing capital. This additional funding builds on the City’s initial investment of $20 million to both funds. With this new funding, M/WBEs and small businesses will now have access to $60 million in total revolving loan funding, triple the City’s initial investment.
In May of 2017, Mayor de Blasio convened all the City’s designated banks to further these partnerships and create accessible capital for the city’s minority and women-owned businesses. This announcement is the first of round of commitments
The Mayor insisted “By making an additional $40 million available in affordable loans, these banks are invested in the success of minority and women-owned businesses across the city. These new commitments will help us to continue working to overcome the historic barriers that hold back small businesses, especially those run by women and people of color. They will now have the capital that they need in order to bid on City contracts and reap the benefits of New York’s growing economy, helping us build a more equitable and fair city,”
Deputy Mayor for Strategic Policy Initiatives and citywide M/WBE Director-Richard Buery noted “Every day I climb the steps of City Hall with pride knowing that I get to serve the City I love. But today, I am especially proud to see the public sector and private sector coming together to deliver resources that will help create an economy that works for all. I applaud Amalgamated Bank, Bank of America and TD Bank for fostering the entrepreneurial spirit of M/WBEs with their $40 million investment. Today we are proving that New York City is truly the fairest big city in America,”
Deputy Mayor for Housing and Economic Development-Alicia Glenn added “to combat this affordable housing crisis, we are building a deeper bench of women and minority owned business and development teams. These firms are ready to grow and take on the next big project—they just need some additional support to do it. Our Emerging Developer and Contract Financing funds are crucial pieces of that effort, and we are thrilled to welcome Amalgamted, TD Bank and Bank of America as new capital partners helping us reach and grow even more businesses”
“We congratulate Mayor de Blasio for his initiative to expand opportunities and access to capital for minority- and women-owned businesses,” said Reverend Jesse L. Jackson, Sr., Founder and President, Rainbow/PUSH Coalition. Rev.Jackson continued “The Mayor is setting an example for municipalities across the country where access to capital remains a critical barrier to growth for black, Latino, and women business owners.”
The breakdown of these investments are as follows:–
|Bank||Total new investment||Goal of Investment|
|Amalgamated Bank||$20 MM||Emerging Developer Loan Fund|
|Bank of America||$10 MM||Contract Financing Loan Fund|
|TD Bank||$10 MM||Contract Financing Loan Fund|
Since launching in 2017, the Contract Financing Loan Fund has provided critical funding for M/WBEs and small businesses contracting with the City. These businesses have had access to $500,000 in loans at a low three-percent interest rate. Access to this affordable financing through the fund has allowed firms to grow and work on over $38.5 million worth of City contracting opportunities. The Department of Small Business Services manages and administers the CFLF.
Businesses interested in receiving a contract financing loan can visit nyc.gov/contract financing to apply online. A participating lender will follow up with eligible businesses. Participating lenders include BOC Capital, Inc., TruFund Financial Services and Excelsior Growth Fund.
The Emerging Developer Loan Fund has, since 2016, provided low-interest loans that range from $100,000 to $2.5 million to emerging developers and M/WBEs. With the addition of $20 million in funding, the EDLF 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. Since 2016, the New York City Economic Development Corporation has approved $6.65 million in loans, allowing businesses to take on over $51.35 million worth of projects. The increase in funding will provide the EDLF with an opportunity to provide funding to projects on its current $42 million pipeline of 40 projects. The NYCEDC manages and administers the EDLF. Interested emerging developers can find more information and apply through the fund’s website at nycedc.com/EDLF.
The Mayor’s announcement comes on the heels of unprecedented investments in M/WBEs as well as the enactment of a new State law – Chapter 504 of the Laws of 2017 – that expands the City’s authority to spur economic opportunity for M/WBEs.
In Fiscal Year (FY) 2017, the City for the first time in history awarded over $1 billion to M/WBEs. This only encompasses Mayoral agencies. When considering non-Mayoral agencies, such as agencies that receive Federal and State funding, the City has award over $6 billion to M/WBEs since the start of the Administration.
The Administration, along with elected partners in Albany, advocated for Chapter 504 of the Laws of 2017 which has, among other things, increased the City’s discretionary spending limit for M/WBEs, meaning these businesses are no longer required to first go through a time-consuming, formal bidding process for relatively small contracts for goods and services. The City’s discretionary spending limit is now $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. State Senator Marisol Alcántara and Assembly Member Alicia Hyndman were sponsors of the bill.
These recent developments, coupled with the new $40 million investments, provide the City additional resources to meet Mayor de Blasio’s goals to expand economic opportunity for M/WBEs, including:
- Certifying 9,000 M/WBEs by end of FY2019
- Awarding 30% of the value of City contracts to M/WBEs by end of FY2021
- Awarding $16 billion to M/WBEs by end of FY2025