From labor challenges to supply-chain shortages, the COVID-19 pandemic and its lasting impacts have taken a financial toll on small businesses. Fortunately, New York State business and lending leaders provided a funding solution for many businesses that didn’t receive federal assistance; the New York Forward Loan Fund.
The statewide program was a financial lifeline that helped small businesses in every community keep their doors open, retain staff, and pivot as needed. Here are the program’s highlights including real-life stories of business owners who benefitted and answers to borrowers’ most frequently asked questions about next steps.
New York Forward Loan Fund program highlights and success stories
Although federal pandemic-relief programs provided essential financial assistance to millions of businesses across the country, thousands of small businesses across New York State still needed another solution. Fortunately, leading business and lending institutions in New York State quickly created an $85 million loan fund targeted to small businesses in need.
A data-collection and analytics firm, 60 Decibels, was selected to perform an analysis of the program to ensure that it served small businesses as intended, including reaching women- and minority-owned businesses. Here’s what the analysis found:
- At least 1,539 small businesses received loans between May 2020 and October 2021.
- Nearly half (44%) are women-owned businesses and more than half (51%) are BIPOC.
- 52% are very small businesses, with annual revenue under $250,000.
- 90% said the loan terms were favorable and the application process was easy to follow.
- More than half indicated that this was their first loan for their businesses and that they felt they had no other viable funding solution at the time.
- Respondents gave the collective CDFIs an ‘Excellent’ rating.
Success stories: Business owners who received New York Forward loans
- Flowerwell, Finger Lakes Region, NY
- Kiper Moving, Buffalo, NY
- Maison Bergogne, Narrowsburg, NY
- Six Juice Company, Long Island, NY
- Undergrounds Coffee House & Roastery, Buffalo, NY
Next steps for New York Forward Loan Fund borrowers: Frequently asked questions
Q: When does my loan payment change from interest-only to principal and interest?
A: New York Forward loans are interest-only for the first 12 months of the loan period, then in month 13, the payments change to principal and interest. For example, if you received a loan in May 2021, then your loan repayment will change to principal and interest as of May 2022.
Q: What will my new payment amount be when the repayment changes from interest-only to principal and interest payments?
A: This is based on the amount that you borrowed and would have been in your loan closing documentation. As an example, for borrowers at the maximum loan amount of $100,000, the principal and interest payment would be $2,200 each month. If you’re unsure or can’t locate it, please contact your lender to find out.
Q: What’s the best way to budget for the new payment?
A: Understanding your business’s monthly cash flow from operations and accounting for any new debt undertaken is imperative for successful financial management. This article can help if you’re not familiar with how new debt will impact your business’s finances – and your business’s finance manager or your certified public accountant (CPA) can also help. If you need additional help, contact your lender.
Q: If I anticipate having trouble making the new monthly loan payments, can Pursuit help?
A: Pursuit’s role in the New York Forward Loan Fund program was limited to administering the application process, so, unfortunately, we’re not able to make any modifications to any of the loans. One option would be to talk to your bank to see if they have any options; however, it’s worth noting that the 3% interest rate for the New York Forward loans is likely the best interest rate that you’ll find anywhere.
Q: Will there be another round of New York Forward loan funds?
A: At this time, there hasn’t been an announcement of additional New York Forward funding. However, if you need additional funding, see the next Q&A.
Q: If my business received a New York Forward loan through Pursuit and it’s in good standing, can I apply for other Pursuit loans?
A: Yes! Take a look at our various loan programs and then reach out to see how we can help you.
Pursuit is here to help
Pursuit is a mission-driven, community-focused lender. Our goal is to help small businesses throughout New York, New Jersey, and Pennsylvania access the funding options you need to launch, grow and thrive. We offer over fifteen different loan options covering a huge range of business needs. And we specialize in helping small business owners who may not qualify for conventional commercial loans, as well as minority- and/or women-owned small businesses. If your business is located anywhere in New York, New Jersey, or Pennsylvania, contact us today to speak with our experienced team and to learn about all the ways that we can help you launch and grow the business of your dreams.