NEW YORK – New York launched a program that gives startups and early-stage businesses access to affordable loans of up to $100,000.
The $10 million Main Street Capital Program is part of the New York State Small Business Credit Initiative led by Empire State Development and seeks to help close the financial gap that many entrepreneurs face. get when they launch and grow their companies.
“New York businesses are the backbone of our economy and a key driver of our economic growth,” said Governor Hochul. “The Main Street Capital Program will encourage and strengthen our small businesses, especially our female business owners and entrepreneurs, creating jobs and investments in New York State.”
Recognizing the critical support that entrepreneurs need from the start, this program offers minimum payments for the first 12 months of the loan to give businesses more flexibility as they launch and growing
The loans last up to six years with a fixed interest rate of 9.9%. For the first year, borrowers will pay less than just interest, with no principal payments during that time.
Many entrepreneurs in the start-up and early growth stages of a business lack access to capital and networks to obtain the funding necessary to succeed. The Main Street Capital Loan Fund offers a more accessible option, especially for socially and economically disadvantaged sole proprietors (SEDI) and very small business entrepreneurs (VSB) with less than 10 employees -work.
Startups and early stage companies must complete a pre-application questionnaire. Based on their answers, they will be invited to fill out a full application for the program, or they may be connected to the local Entrepreneurship Assistance Center (EAC) or Small Business Development Center (SBDC) for additional assistance.
Below we answer some questions about the program.
What is the program about?
In partnership with Pursuit, the $10 million Main Street Capital Loan Fund (MSCLF) offers term loans of $100,000 or less to emerging and early-stage businesses, particularly established companies in communities or are from communities that have historically faced challenges in obtaining. favorable credit or favorable terms. MSCLF loans can be used for working capital, acquisition of equipment and other essential assets, and talent recruitment.
How does it work?
To apply for an MSCLF loan, businesses must complete a pre-application on Pursuit’s online platform (link below). If approved, the MSCLF loan will have a fixed interest rate and will only require interest payments for the first year.
After the first year, Pursuit will evaluate the borrower’s cash flow and income projections to determine if they can continue to make interest-only payments for an additional year. Any late interest will be added to the loan balance, and both principal and interest will be amortized over the remaining loan term in equal monthly payments.
Who meets the requirement?
Eligible companies:
To qualify for an MSCLF loan, businesses must:
- Be owned by a New York State resident.
- Works in New York state.
- Employ 100 or fewer full-time employees.
- Maintain annual revenue of less than $5 million.
- Be a startup or early stage company operating for less than 4 years.
- Provide a personal guarantee to owners with more than 20% ownership interest.
Eligible uses of MSCLF loans:
Loans can be used for:
- Startup costs.
- Working capital.
- License fees.
- Machines and tools.
- Account charges.
Loan conditions and restrictions
MSCLF loan terms:
- Loans up to $100,000.
- Interest fixed at 9.90% APR.
- Maximum term of 6 years.
- Principal deferred in the first year with interest-only payments and amortized over the remaining loan term in equal monthly installments.
MSCLF Loan Restrictions:
Loans cannot be used for:
- Refinance or eliminate existing debt or equity.
- Recover delinquent income taxes if the borrower does not have a repayment plan.
- Refundable taxes held in trust or escrow (for example, payroll or sales taxes).
- Return owners for capital investment.
- Buy any part of the ownership interest in the company.
- Acquire or hold passive investments in real estate.
How do I apply for the loan?
Click here to begin the pre-application process for an MSCLF loan with a Pursuit partner.
Where can I get more information?
2024-09-30 20:27:57
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