Participating lenders have launched the “Bridge to Success” loan program, committing at least $20 million to expand access to short-term bridge loans for minority and women-owned business enterprises (MWBEs).
The program will provide qualified MWBEs with short-term financing to participate in up to $1 billion in contracting opportunities with the state of New York.
Gov. Andrew Cuomo made the announcement in a news release his office distributed today.
Under the program, Empire State Development (ESD) is providing $2.73 million in loan-loss reserves to five participating lenders who will make $20 million available in “much needed,” short-term, working-capital loans to qualifying MWBEs, Cuomo’s office said.
ESD’s support “stimulates” increased lending in this area and enables participating lenders to mitigate risk, the office added.
The participating lenders include the New York Business Development Corp (NYBDC) and SEFCU, which is short for State Employees Federal Credit Union.
SEFCU serves parts of the Capital Region, Southern Tier, Central New York, Mohawk Valley, Finger Lakes and Western New York regions.
Both organizations are headquartered in Albany, according to their respective websites.
Loans made under the program will typically be under $200,000 with terms under two years.
Funds will provide qualified MWBEs the bridge capital they need to hire staff, buy materials, or purchase equipment.
The loans are intended to give the contractors a “better chance” to secure and perform on the up to $1 billion that is currently available in state-contracting opportunities, Cuomo’s office said.
The program “complements” the New York State Surety Bond Assistance Program, which provides training and financial support to help MWBEs and other small businesses access the surety bonding necessary to bid and perform on state-construction contracts, the office added.
Small firms have secured more than $40 million in surety bonding to date through that program, according to the governor’s office.
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