Where to Find Small Business Loans in New York

by Kieran Daly
April 26, 2024
Where to Find Small Business Loans in New York

If you have a small business in New York State or New York City, at some point you may need financing to keep your company going or to expand. 

Getting loans from traditional lenders like banks can be daunting, with complicated application processes and stringent approval requirements. However, there are other options for small business loans in New York, as well as grant programs, which is great news for businesses located in the Empire State.

6 Ways to Get Grants and Small Business Loans in New York

There are a variety of small business loan programs in New York. Here are some of the organizations and types of business funding they offer to small business owners and entrepreneurs in New York.

1. SBA Loans From CDCs and CDFIs

SBA loans, which are backed by the U.S. Small Business Administration, are a great way for businesses in New York and beyond to get the funding they need. 

You can apply for SBA loans through Certified Development Companies (CDCs), which are nonprofits that work with the SBA to service and distribute loans. You can also get some SBA loans through community development financial institutions (CDFIs), which provide funding and resources for small businesses.

Eligibility depends on the type of loan you are applying for, but you’ll often need to show that you can’t get funding through traditional lenders. You’ll also need to provide cash flow statements and, in some cases, have collateral or a personal guarantee.

The main programs offered by the SBA include:

  • SBA 7(a) loans: These loans offer flexible repayment terms and can be used for equipment, real estate, working capital, or refinancing existing debt. They are offered at a fixed or variable rate that can't go above the maximum rates set by the SBA. You can get up to $5 million, and the loan terms can be up to 10 years for most loans or up to 25 years for real estate.

  • SBA 504 loans: With SBA 504 loans, you can use the funds to purchase major assets like inventory and real estate. Up to $5.5 million in financing is available, with a repayment period of 10, 20, or 25 years.

  • SBA Microloans: Microloans from the SBA are smaller, short-term loans of up to $50,000. In fact, the average loan size is about $13,000. The funds can be used to help your small business expand by buying inventory or equipment. But they can’t be used to pay off existing debt or purchase real estate.

2. Loans from Pursuit Lending

Pursuit Lending is a CDFI based in New York that offers resources and loans for small businesses. Some of the loan programs they offer include: 

  • ImpactLoan: The ImpactLoan provides up to $500,000 in funding for small businesses. It is designed to help with larger projects, such as buying inventory, real estate, or equipment.The ImpactLoan has a fixed interest rate and no prepayment penalty, with a term of five years.

  • New York City Small Business Opportunity Loan Fund: This loan has been temporarily paused for new applicants. It's a collaboration with the City of New York. It gives businesses in the five boroughs access to low-interest financing for loans up to $250,000. 

  • Small Business Loans for Veterans: Entrepreneurs who are veterans, or the immediate family member of a veteran, can benefit from financing through this loan program. You can get a reduced, fixed interest rate loan of up to $250,000, which can be used for working capital, debt refinancing, purchasing equipment, and more. 

  • SmartLoan: Pursuit also offers quick business loans of up to $100,000. The interest rate is capped at 11.9% with a term of up to six years. The loan can be used for nearly any business purpose. To qualify you need a personal credit score of 640 or higher, be in business for two years, have at least two employees, and make no more than $120,000 in annual revenue.

3. Grants From the New York Homes and Community Renewal Department

Businesses in the Empire state can get funding in the form of small business grants through the state of New York. In most cases, you’ll need to work with your local communities, as many of the grants are given directly to local governments and nonprofits, which then distribute the money to businesses.

Some of the loan program options include:

  • Community Development Block Grant Economic Development Program: This program funds projects that create or retain jobs for low- and moderate-income people in towns with a population below 50,000 or counties whose population is under 200,000. It provides funding for economic development of the area as well as for small businesses and microenterprises.  

  • New York Main Street: This program is designed to support businesses that are located on traditional main streets in cities throughout New York state. Eligible communities can get grants to improve the facades of businesses, upgrade buildings, and improve the streetscape. To be eligible, you have to be located in a community that has experienced a lot of neglect or decay; more than 50% of the residents are low-income, and many buildings in the communities downtown area are vacant. 

4. Loans From the NYC Department of Small Business Services

NYC-based small businesses can also get financing assistance from the NYC Department of Small Business Services

This city-run program is designed to help borrowers understand their needs. They offer a variety of services, including connecting you with available loans and grants through their Funds Finder

You can also get help with reviewing and preparing documents when applying for small business loans in New York.

And if you have a contracting business bidding or working with an NYC agency or city-funded entity, you may be able to get a loan of up to $1 million through their Contract Financing Loan Fund. The repayment terms are aligned with the project payment schedule.

5. Loans From New York’s Empire State Development

Empire State Development (ESD) is a government department of the state of New York that promotes the state economy. They invest directly in the economy by helping early-stage businesses, supporting existing companies, and promoting equality throughout the state. 

ESD offers a number of lending programs, including the following.

Metropolitan Economic Revitalization Fund (MERF) 

The Metropolitan Economic Revitalization Fund (MERF) provides loans of up to $5 million to businesses that are creating or retaining a significant number of jobs in economically distressed areas. The loans can be used to improve land and buildings, for construction projects, or to purchase machinery and equipment.

To apply, businesses need to be located in the service area of the Port Authority of New York and New Jersey. This includes New York City as well as some areas in Nassau, Westchester, and Rockland counties. The loan terms are capped at 20 years for real estate and seven years for machinery and equipment. The funds can’t be used for residential construction or debt refinancing, or go to legal, medical, or news media businesses.

New York Forward Loan Fund 2

This is the second phase of this loan program, which previously provided funding for 1,700 small businesses in the state. The New York Forward Loan Fund 2 provides loans of up to $150,000 with competitive, fixed interest rates and no origination fees. Not only do small businesses get financing, but they also get free business guidance from experts in their community. The application process is simple and can be done online.

The funding is available to anyone who is located in the state with less than 100 full-time employees and no more than $5 million in gross annual revenue. Your business must be based in New York and in operation for at least a year when you send in your application. The money can be used to pay for equipment, business operations such as payroll and rent, marketing, building renovations, and more. 

Capital Project Loan Fund

With the Capital Project Loan Fund, manufacturing, distribution, and warehousing businesses can get loans to help finance a portion of the cost of renovating existing buildings, constructing new buildings, or purchasing machinery and equipment. The loan can be used for up to 40% of the total cost and can be used with a combined bank loan to finance up to 90% of the project.

To apply, the borrower needs to get a commitment letter from the bank as well as pay for at least 10% of the project. Personal guarantees are also needed from anyone who owns 20% or more of the business. 

6. Online Lenders

Another option for small business loans in New York is to apply through online lenders. These lenders often have a range of financing options, such as business lines of credit, working capital advances, or invoice factoring. Online lenders often have a quick application process, and there’s usually no need to provide a lot of paperwork such as a business plan or financial forecasts.

Find the Best Small Business Loans in New York

Whether you need funding to get through a seasonal dry spell, are looking to expand your business, or just need some business financing to buy more inventory, there are plenty of options in New York.

From getting funds through the state’s government funding programs or from online lenders, you are sure to find a way to get business financing to help your company grow.

Backd is one of the many providers available to small businesses in New York. You can get between $25,000 and $2 million with a working capital advance or get a revolving business line of credit of up to $750,000.

Apply for business financing today with Backd and receive an approval decision in just 24 hours.

What would you do with the right amount of capital?

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