Governor Kathy Hochul has announced the launch of the Main Street Capital Program, a $10 million initiative designed to provide affordable loans to New York’s start-ups and early-stage companies. This program aims to support entrepreneurs, particularly those who are socially and economically disadvantaged, by offering loans of up to $100,000 with flexible payment options. While this initiative seeks to bolster New York’s economy and create jobs, it raises important questions about its long-term sustainability, potential impacts on existing businesses, accountability in the use of taxpayer funds, and equitable access for all entrepreneurs. Here are four critical questions that arise from this new initiative:
Governor Hochul Helps New York’s Entrepreneurs
With Launch of Main Street Capital Program
$10 Million Fund Will Provide Start-Ups and Early-Stage Companies with Affordable-Rate Loans up to $100,000
Governor Kathy Hochul today announced the launch of the Main Street Capital Program, a new $10 million fund that will provide qualifying start-up and early-stage companies with access to affordable term loans up to $100,000. Part of New York’s broader State Small Business Credit Initiative efforts led by Empire State Development, this program will help bridge the financing gap experienced by many entrepreneurs as they launch and grow their businesses.
“New York’s businesses are the backbone of our economy and a key driver of our economic growth,” Governor Hochul said. “The Main Street Capital Program will boost and strengthen our small businesses, especially our minority and women entrepreneurs, creating jobs and investment in New York State.”
Recognizing the critical support entrepreneurs need early on, this program offers minimal payments for the first 12 months of the loan to give businesses more flexibility as they launch and grow. Loans will be up to six years with a fixed interest rate of 9.9%. In the first year, borrowers will pay less-than-interest-only, with no principal payments during that time.
This $10 million fund is a partnership between Empire State Development and Pursuit, a community lender with a 70-year history serving businesses in all stages in New York State and beyond.
Many entrepreneurs in the startup and early-growth phases of business lack access to equity and networks for financing needed to be successful. The Main Street Capital Loan Fund offers a more accessible option, particularly for Socially and Economically Disadvantaged Individual Owned Business (SEDI) and Very Small Business (VSB) entrepreneurs with fewer than 10 employees.
Empire State Development President, CEO and Commissioner Hope Knight said, “Entrepreneurs and their innovation fuel New York State’s economy. The Main Street Capital Program is one of the ways Empire State Development is helping provide promising start-ups and early-stage companies the tools they need to launch, grow, and achieve business success.”
Pursuit CEO Chris Levy said, “New York State has been a foundational partner of Pursuit for decades. We are thrilled to be launching another innovative program that benefits underserved startup businesses throughout New York State by ensuring they have a path to success.”
Pursuit’s Community Development Financial Institution Affiliate President Steve Cohen said, “New and early-stage small businesses often need more time to grow their revenues before repaying their debt, and this time crunch can lead them to predatory sources for capital. The Main Street Capital Loan Fund offers New York’s newest and smallest businesses their best chance at long-term success by providing flexible capital and advisory services to support their future.”
State Senator Sean Ryan said, “Small businesses are the backbone of New York’s economy. It is important that we enact policies and programs that support them in the early stages that are so critical to a new business. This program will help budding entrepreneurs get established and keep fledgling businesses on track as they establish themselves in their communities.”
Assemblymember Albert A. Stirpe Jr. said, “The Main Street Capital Program is a valuable resource for New York entrepreneurs, offering affordable-rate loans of up to $100,000. The loan fund provides a more accessible financing option, particularly for socially and economically disadvantaged individual-owned businesses, as well as very small businesses with fewer than 10 employees. New York’s State Small Business Credit Initiative, led by Empire State Development, will help bridge the financing gap, empowering entrepreneurs to turn their dreams into reality and grow their businesses.”
Startups and early-stage businesses must complete a pre-application questionnaire. Based on their responses, they will be invited to complete a full application for the program, or they may be connected with their local Entrepreneurial Assistance Center (EAC) or Small Business Development Center (SBDC) for additional support.
For more information on the fund, eligibility, and requirements, please visit the program’s webpage.
Governor Hochul’s Support for New York’s Small Business Community
These events build on Governor Hochul’s commitment to helping New York’s small businesses contribute to their local economies. During Small Business Month in May, the Governor announced new initiatives to support business owners, including a $6 million Innovation Matching Grant Program to New York companies applying for the certain federal funding programs and additional support for thousands of NYSIF-insured businesses.
Governor Hochul also announced that New York State has exceeded its goal for MWBE utilization on New York State contracts with a utilization rate of 32.30 percent during the 2023 Fiscal Year, the highest MWBE utilization rate in the country for the third year in a row. Nearly $3 billion in state contracts were awarded to MWBE firms during the 2023 Fiscal Year, and nearly $29 billion in state contracts have been awarded to MWBEs since 2011Additionally, New York has not only met its commitment to shortening response times for MWBE certification applications to 90 to 120 days — it has exceeded that commitment. Since August 1, 2023, ESD has certified and recertified more than 3,000 businesses, with the average application processing time now taking on average, 90 days. The announcement builds on the Governor’s strong support for MWBEs, including the historic elimination of New York’s yearslong MWBE certification backlog following an $11 million investment in the FY 2023 Budget.
There are nearly 695,000 small businesses in New York State and approximately 98 percent of New York businesses have fewer than 100 employees. These businesses employ more than 4.5 million individuals in fields from retail and food service to financial services, to agriculture, innovation and construction. In addition to the summer event series, NYSDOL supports businesses of any size and offers several resources.
Business Services Representatives work with entrepreneurs to create customized solutions to help meet their business goals. The Department also offers free human resource service consultations and assists with workforce recruitment to help employers find skilled workers. NYSDOL offers guidance on hiring incentives, tax credits and funding opportunities that can help employers curb costs.
About State Small Business Credit Initiative
More than $500 million in federal funding has been allocated to support the resurgence of small businesses across New York State through the State Small Business Credit Initiative (SSBCI), a program through the American Rescue Plan Act. Managed by the U.S. Department of Treasury, SSBCI provides funds to support programs for small businesses, including socially and economically disadvantaged individual (SEDI) owned businesses and very small businesses (VSB), to recover from the economic effects of COVID-19 and allow them opportunity to succeed in the post-pandemic economy. With this funding, Empire State Development (ESD) has developed a suite of capital access and equity programs to help New York State small businesses grow and succeed. Learn about the following SSBCI programs that Empire State Development has established.
About Pursuit
Pursuit is empowering businesses through access to responsible capital and resources to reach higher, transform and grow. With nearly 70 years of lending experience, you’ll find a wide selection of loan programs and advisory services to support businesses at any stage. We’re doing our part to create a more inclusive economy that ensures every business owner has a path to success. Learn more at www.pursuitlending.com.
Here are four critical questions regarding Governor Hochul’s launch of the Main Street Capital Program:
- Long-Term Viability of the Program: How does the state plan to ensure the sustainability of the Main Street Capital Program beyond the initial $10 million fund, especially in light of New York’s history of budget deficits and increasing taxes?
- Impact on Existing Businesses: What measures are in place to prevent potential market distortions that could arise from providing loans specifically to start-ups and early-stage companies, potentially disadvantaging established businesses that also require financial support?
- Accountability and Oversight: What accountability mechanisms will be implemented to monitor the distribution and utilization of these loans, ensuring that taxpayer funds are used effectively and that there is no misuse of the program by recipients?
- Focus on Diverse Business Ownership: While the program aims to support minority and women entrepreneurs, how will the state ensure that all eligible businesses, regardless of ownership demographics, have equal access to these funds and that the program does not inadvertently create further division among business owners?
Sources: BigNY.com , NY State Governor.ny.gov
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