New York to advance equity for small businesses

by Ricky Rillera

| Photo by Tim Mossholder on Unsplash

NEW YORK – To expand access to capital for socially and economically disadvantaged individual (SEDI)-owned small businesses, New York is participating in the federal Initiative for Inclusive Entrepreneurship, a national effort led by the U.S. Department of the Treasury.

The federal program aims to ensure that small businesses have access to equitable implementation of the U.S. Treasury’s $10 billion State Small Business Credit Initiative (SSBCI) – of which New York received more than $500 million.

More than $500 million in federal funding has been allocated to support the resurgence of small businesses across New York State through the State Small Business Credit Initiative (SSBCI), a program through the American Rescue Plan Act. Managed by the U.S. Department of Treasury, SSBCI provides funds to support programs for small businesses, including (SEDI) owned businesses and very small businesses (VSB), to recover from the economic effects of COVID-19 and allow them the opportunity to succeed in the post-pandemic economy. With this funding, Empire State Development (ESD) has developed a suite of capital access and equity programs to help New York State small businesses grow and succeed.

According to ESD President, CEO, and Commissioner Hope Knight, New York is one of only eight states chosen to participate in the Initiative for Inclusive Entrepreneurship and partner with Founders First to expand the reach of SEDI-owned businesses in New York.

“New York’s business landscape must reflect the rich diversity of our state,” Governor Kathy Hochul said. “My administration is committed to helping break down the systemic barriers that minority- and women-owned businesses face, and with the Biden administration’s partnership, we can ensure that all businesses have the opportunity to thrive in New York State.”

Empire State Development (ESD) has partnered with Founders First Capital Partners, who will leverage a series of on-demand video modules through their Passport for Funding education program, designed to help SEDI-owned companies understand and overcome common obstacles to funding readiness.

Founders First Capital Partners launched the Supplier Innovative Finance Program to support the State Small Business Credit Initiative. This program would guide small, certified suppliers to enhance their capacity and increase their awareness of innovative finance and capital access.

Additionally, a comprehensive assessment will be conducted of the participating (Minority and Women Business Enterprise (MWBE). Depending on the firm’s needs, they will be matched with a participating Community Development Financial Institution (CDFI) to better access the State’s SSBCI lending programs. These on-demand educational modules will prepare these businesses to grow and raise funding by making them aware of potential pitfalls that prevent the ability to be funded.

The CDFI Revolving Loan Fund Program provides microloans up to $25,000 to targeted small businesses in New York State.

According to the Hochul administration, New York State leads the nation with a 32.3 percent utilization rate in MWBE utilization on its state contracts. Nearly $3 billion in State contracts were awarded to MWBE firms during the 2023 Fiscal Year, and almost $29 billion in State contracts have been granted to MWBEs since 2011. Additionally, the resources provided by Hochul in the FY2023 State Budget allowed ESD to eliminate the long-standing certification backlog, which previously could have taken as long as 499 days.

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