SBS Capital Access Bidding DDC Contracts: Financial Resources April 11, 2019 1
SBS prepares business owners for financing and connects them to capital Expert Advising Prepare businesses for loans and match entrepreneurs with the right financing partner Short-term Investment Invest in funds where there are market gaps or opportunities that help increase access to capital 2
NYC builds relationships with lenders across the city… NYC Business Solutions Centers NYC Industrial Providers serve NYC Business Solutions businesses in the manufacturing, Industrial construction, transportation, wholesale, utility, and film production industries. NYC Business Solutions Centers serve businesses in all other industries. 3 Each Center has at least 1 Finance Account Manager
…and works with businesses to match them with the right lender and walk them step-by-step through the loan process Intake & Assessment Application Planning & Packaging Referral to Lender Advisory Service • Work with lenders to • Evaluate financial needs • Submit final loan • Provide additional clarify package loan application to lender to on loan approval/ • Analyze business and • Collect financial analysis and review declination, if possible personal finances documents and complete • Follow up to ensure • Assist in post-financing • Identify best available all forms disbursement of funds advisory financial product • Structure loan request 4
SBS helps entrepreneurs access a variety of loan types from different lenders • Since the start of the Administration, SBS has connected approximately 1,800 businesses to more than $150 million dollars in financing Other Debt Refinancing 3% 4% Mobilization Banks Capital 12% 4% Other Startup 21% CBOs 7% 10% Working Capital Inventory 50% Crowdfunding 14% 12% CDFIs Equipment 45% Purchase 18% 5
In addition to helping businesses access capital in the market, SBS invests in funds where there are market gaps • Through its ongoing work with small businesses, the City understands gaps and trends in real time • The City works with private institutions to launch new products , including: - Hurricane Sandy Business Loan & Grant Program - Contract Financing Loan Fund - Bond Collateral Assistance Fund - WE Fund: Crowd - WE Fund: Growth - WE Fund: Credit 6
WE Fund products help women entrepreneurs access the capital they need to start and grow their businesses WE Fund Growth WE Fund Crowd offers loans of up to $125,000 offers crowd-funded term for established businesses loans at 0% interest for up to that are looking to expand $10,000 7 WE Fund Credit is coming this spring!
Contract Financing Loan Fund and Bond Collateral Assistance Fund help M/WBEs access contracting opportunities with the City $10 Million Bond Collateral Assistance Fund available for M/WBEs and small businesses $10 Million Contract Financing Loan Fund allows M/WBEs and small businesses to apply for low-interest contract financing loans of up to $500,000 8
The M/WBE Funds were launched to help meet Mayor De Blasio’s goal of awarding more contracts to M/WBEs Mayor De Blasio’s goals for M/WBE program Award 30% of City contracts ($) to MWBEs by 2021 • Double the number of certified and re-certified MWBEs from 4,500 to 9,000 • by 2019 Access to financing is necessary to achieve M/WBE goals Financing is one of the key barriers to accessing and successfully • performing on City contracts. Businesses face challenges supporting project costs to start or get through a contract. Examples of costs include equipment, payroll, materials and other unexpected expenses Access to bonding is necessary to achieve M/WBE goals Sureties often require businesses to provide cash as collateral and/or an • assurance of liquidity before providing access to surety bonding. Such an allocation of resources presents an obstacle for many businesses: as a result, companies are unable to access the surety bonds they need to bid or perform on contracts In Fiscal Year 2017, NYCEDC and SBS launched two funds, capitalized at $10M each, to address these gaps. Since, we have approved $11M and over 60 awards.
Bond Collateral Assistance Fund Program Overview: M/WBEs and small businesses can access guaranty funds of up to $500,000, or 50% of the contract (whichever is less), in order to meet cash collateral requirements for surety bonding on NYC contracts. The goal of this program is to enhance the ability of business owners to access surety bonds, including bid, payment, and performance bonding , to perform on City construction contracts. The Fund will help benefit contractors who have trouble meeting the following requirements: • High Credit Score • Past Experience Win Access increasing higher level • Collateral size of of bonding contracts Gain Experience Eligibility: • Have an operating construction business • Be bidding or planning to bid as a prime or subcontractor on a contract with a City agency or NYCEDC that requires bonding • Additional eligibility requirements may apply For more information go to nyc.gov/bondfund 10 DEPARTMENT OF SMALL BUSINESS SERVICES
Recap of Contract Financing Program For more information go to nyc.gov/contractfinancing 11 DEPARTMENT OF SMALL BUSINESS SERVICES
The Contract Financing Loan Fund has helped fund >$50M in contracts >$10M in >60 approved loans Services, 37% - 33 Primes, 27 Subs Construction, - $50.5M of contracts 50% supported Goods, 13% Supported contracts with over 20 Agencies
Questions? For more information go to nyc.gov/contractfinancing
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