New York Small business owners significantly contribute to the Empire State’s job creation and economic growth. However, small businesses sometimes need access to extra capital to sustain operations or fuel growth.
Fortunately, New York provides many business funding opportunities. In addition to small business loans from traditional and alternative lenders, small businesses have access to various government-backed programs, grants, tax credits, and technical assistance.
Explore your available financing options as a New York small business owner and get answers to these questions and more:
New Yorkers can access various business loan programs to fund their operations.
Working Capital Loans: Working capital loans in New York are a type of financing designed to cover a business’s day-to-day operational expenses. These loans often fund inventory purchases, payroll, rent, and other short-term financial needs. They can provide businesses with the cash flow to keep operations running smoothly and seize economic opportunities. Working capital loans are typically easier to qualify for than other business loans, making them a popular choice for small businesses needing quick funding.
Business Line of Credit: A business line of credit in New York is a flexible financing option that allows small businesses to access funds up to a predetermined limit. It works similarly to a credit card, where you can borrow and repay funds as needed, only paying interest on the amount you use. This type of financing is ideal for covering short-term expenses, managing cash flow fluctuations, or seizing growth opportunities without applying for a new loan each time.
Revenue-Based Financing: Revenue-based financing in New York is a form of small business funding in which repayments are based on a percentage of the company’s revenue. This type of financing allows businesses to access capital without taking on additional debt, making it an attractive option for companies with fluctuating revenue streams. Investors receive a return based on the business’s performance, aligning their interests with its success.
SBA Business Loans: SBA loans are small business loans guaranteed by the Small Business Administration, providing funding to help businesses start, grow, and succeed. These loans offer favorable terms such as lower interest rates and longer repayment periods than traditional bank loans, making them an attractive option for small business owners. SBA loans in New York can be used for various purposes, including working capital, equipment purchases, real estate acquisition, etc.
Invoice Factoring: Invoice factoring in New York is an alternative business funding option in which a business sells its accounts receivable to a third party at a discount. This provides immediate cash flow, allowing the business to cover expenses or invest in growth without waiting for customers to pay their invoices. The factoring company then collects the total amount from the customers directly.
Merchant Cash Advance: A merchant cash advance in New York is a form of financing where a business receives a lump sum of money upfront in exchange for a percentage of future credit card sales. This type of funding is typically used by small businesses with fluctuating revenue streams or those needing quick access to capital. While merchant cash advances can provide fast funding, they often come with high fees and may not be suitable for all businesses.
Business Term Loan: Business term loans in New York are a type of financing where a lump sum is borrowed and repaid over a set period with fixed monthly payments. These loans are ideal for small businesses looking to fund long-term investments like equipment purchases or expansion projects. The interest rates and terms of business term loans can vary depending on the lender and the borrower’s creditworthiness.
Equipment Financing: Equipment financing in New York is a type of small business loan specifically used to purchase equipment or machinery needed for operations. This form of financing allows businesses to acquire necessary assets without draining their cash reserves. Typically, the equipment being purchased serves as collateral for the loan, making it easier for businesses to secure funding.
Asset-Based Loans: Asset-based loans (ABL) in New York allow small businesses to unlock the value of the assets on their balance sheet to secure funding. ABL lenders have business assets appraised and then issue loan amounts based on the appraisal amount. The assets become collateral for the loan, meaning the lender can claim the assets in case of default. Some examples of asset-based business loans include commercial real estate loans, secured term loans, and accounts receivable financing.
In addition to the small business loans listed above, New York offers various specialized and government-backed loan programs to help New York small business owners and micro businesses access funding.
The SBA Subsidy Loan Program is designed to provide financial assistance to small businesses in New York as a result of the COVID-19 program. Under the program, businesses that received an SBA loan before March 27, 2020, could receive relief for all loan payments (principal, interest, and fees) for up to six months. Contact the lender servicing your SBA loan for more information.
The NYC Capital Access Loan Guaranty Program, offered by the NYC Economic Development Corporation (NYCEDC), provides guarantees to lenders for small businesses in need of financing. Through this program, businesses can access loans ranging from $50,000 to $500,000 with a guarantee of up to 40% of the loan amount. This initiative aims to support local businesses in NYC by reducing the risk for lenders and increasing entrepreneurs’ access to capital.
The Job Development Authority Direct Loan Program in New York provides direct loans to businesses looking to expand or relocate within the state. These loans aim to create and retain jobs, support economic growth, and foster innovation. The program offers competitive interest rates and flexible repayment terms to help businesses thrive and contribute to the local economy.
The Metropolitan Economic Revitalization Fund is designed to provide financial assistance to businesses in metropolitan areas to support their growth and development. It works by offering low-interest loans and grants to eligible businesses looking to expand or relocate within designated metropolitan regions, helping to stimulate economic activity and create jobs. The fund aims to revitalize urban areas by attracting and retaining businesses contributing to the local economy and community.
The New York State Small Business Credit Initiative (SSBCI) is a program that provides funding to small businesses through participating lenders. It works by offering credit support to other lenders, allowing them to provide loans to small businesses that may not qualify for traditional financing. This initiative aims to stimulate economic growth by helping small businesses access the capital to expand and create jobs.
The New York Forward Loan Fund is a program designed to provide small businesses with working capital to help them recover from the economic impacts of the COVID-19 pandemic. This initiative offers low-interest loans to eligible businesses that have suffered financial hardship during the crisis. The loans can be used for operating expenses, payroll, rent, and other essential costs to support business continuity and growth.
The New York Forward Loan Fund 2 is a state-sponsored program that provides simple, business-friendly funding to fuel growth. It offers loans up to $150,000 with terms between 36 and 72 months and fixed interest rates. Eligible businesses must have been in operation for at least one year, have fewer than 100 employees, and have less than $5 million in annual revenue.
The New York Business Center for New Americans offers various funding programs to support immigrant entrepreneurs starting or expanding their businesses. These programs provide financial assistance, mentorship, and resources to help immigrants navigate the challenges of entrepreneurship in a new country. The center aims to foster economic growth and diversity in New York City by supporting immigrant-owned businesses.
The WE Fund Credit from the NYC Department of Small Business Services is a financial program designed to support New York City women entrepreneurs. This initiative provides low-interest loans to women-owned businesses, helping them access the capital needed to start or grow their ventures.
The credit program aims to address the gender gap in entrepreneurship by offering financial assistance and resources tailored to the unique needs of women in business. By providing access to funding, the WE Fund Credit empowers women entrepreneurs to achieve their goals and contribute to the city’s economic growth.
| LOAN TYPES | MAX AMOUNTS | RATES | SPEED |
|---|---|---|---|
| Merchant Cash Advances | $7.5k – $1m | Starting at 1-6% p/mo | 1-2 business days |
| SBA Loan | $50k-$10m | Starting at Prime + 2.75% | 8-12 weeks |
| Business Term Loan | $10k to $5m | Starting at 1-4% p/mo | 1-3 business days |
| Business Line of Credit | $1k to $250k | Starting at 1% p/mo | 1-3 business days |
| Receivables/Invoice Financing | $10k-$10m | Starting at 1% p/mo | 1-2 weeks |
| Equipment Financing | Up to $5m per piece | Starting at 3.5% (SBA) | 3-10+ business days |
| Revenue Based Business Loans | $10K – $5m | Starting at 1-6% p/mo | 1-2 business days |
New York includes most industries, with New York City leading the way as a global hotspot for business and industry. As a result, some of the most prominent industries include:
New York City is a significant financial hub, home to Wall Street and numerous banking institutions.
New York is known for its fashion industry, with designers, retailers, and fashion shows making a significant impact.
The tech sector in New York is growing rapidly, with many startups and established companies in areas like software development and digital media.
New York has a strong healthcare industry, with hospitals, research institutions, and pharmaceutical companies playing a vital role.
The tourism industry in New York is thriving, with attractions like Broadway, Times Square, and the Statue of Liberty drawing millions of visitors each year.
Being a tourist destination, global business hub, and hub for arts and entertainment means both New York City and the state as a whole see significant traffic for restaurants, hotels, and other hospitality measures. New York City hosts some of the world’s most famous hotels and restaurants.
New York business loans offer numerous advantages to entrepreneurs and companies looking to grow or expand. These loans provide access to capital for startups, small businesses, and established companies. With a competitive market and a diverse range of industries in New York, businesses can find the funding they need to invest in equipment, hire employees, or launch new products and services.
Additionally, New York business loans often come with flexible terms and competitive interest rates, making them an attractive option for businesses of all sizes. Overall, these financing options can help businesses find new economic opportunities and thrive in one of the most prominent business hubs in the world.
Despite the advantages of business loans in New York, there are also some disadvantages to consider. One downside is the high interest rates that lenders may charge, which can significantly increase the overall cost of borrowing.
Additionally, strict eligibility criteria and collateral requirements may make it challenging for some businesses to qualify for financing. Another drawback is the potential for long processing times, delaying access to much-needed funds. Finally, defaulting on a business loan can have serious consequences, including damage to credit scores and possible legal action from lenders.
The amount of paperwork required for the application depends on your chosen product. For most products, funds can be approved and distributed in up to three business days. Here’s how to apply:
The first step is choosing the most sensible solution to the problem at hand. This should require a decent amount of research, as each product is designed for different types of expenses and cash flow cycles. Are you looking to cover a short-term or long-term cost? Is demand expected to increase or decrease in the coming months?
Considering the funds’ purpose will also help us determine the correct borrowing and terms for your needs.
Here are the documents and information required for all New York business loans:
SBA Loans require additional documents and information. To learn what’s needed for the SBA Loan application, visit our SBA Loan page.
You can begin the application process by calling us or filling out our one-page online application. Either way, you’ll be asked to enter the information from the previous section along with your desired funding amount.
Once you apply, a representative will contact you to explain the repayment structure, rates, and terms of your available options. This way, you won’t have to worry about any surprises or hidden fees during repayment.
If and when you’re approved, funds for Business Term Loans, Business Lines of Credit, Working Capital Loans, Equipment Financing, Merchant Cash Advance, Revenue-Based Business Loans, and Accounts Receivable Factoring should then appear in your bank account in anywhere from 24 hours to one week. For SBA Loans, it usually takes 3-5 weeks (or more in some cases) to receive funding.
Your business loan isn’t just a way to get financing for your business. It’s also an excellent opportunity to start building (or improving) your credit.
Regardless of the type of business loan you get, make all your required payments on time and in full. If you get a business credit line or another form of revolving credit, keep your balance below the credit limit.
Consistently making your business financing payments on time and in full will positively impact your credit. And that means preferred rates and terms when you next need business financing.
If your application is declined, it might be because you applied for the wrong product for your cash flow. We would likely recommend a different product with a less hazardous repayment structure in this case.
Your application might also be declined after it is determined that you cannot afford to take on more debt at this time. Instead, your needs and financial circumstances might be better suited for another financing tool, like a business credit card or even a personal loan. Both options can be accessed through the UCS site and are usually much easier to qualify for than business loans.
If your credit score is preventing you from accessing financing, you should consider credit repair services. We can help you identify the issues that keep your score down and develop practical solutions for eliminating them.
New York small business owners have several lender options to consider for their financing needs.
Traditional small business lenders like banks and credit unions are prominent in New York. They provide small business loans to entrepreneurs with established companies. These lenders typically offer competitive interest rates and long repayment terms, making them popular among business owners seeking stability. However, qualifying for business loans from a traditional lender can be much more difficult.
Alternative lenders and online lenders have gained traction in recent years due to their quick approval processes and flexible lending criteria. These lenders cater to a wide range of businesses, including those with less-than-perfect credit scores, offering small business loan resources that may not be available through traditional channels.
The rise of fintech business financing marketplaces has revolutionized the lending landscape in New York. These platforms connect entrepreneurs with a diverse network of lenders, streamlining the borrowing process. Fintech platforms like United Capital Source leverage technology to provide access to various funding options, empowering business owners to find the best financing solutions for their needs.
Local community development financial institutions are crucial in supporting small businesses in New York. These organizations offer specialized small business lending programs tailored to the unique needs of local entrepreneurs. Community lenders provide financial assistance to businesses that may not qualify for traditional bank loans through partnerships with government agencies and private donors.
Pursuit Lending: Pursuit Lending is a prominent NY CDFI that offers SBA funding, with the SBA microloan as its most popular option. They provide accessible financial assistance to small businesses in New York, helping them thrive and grow in their communities. Pursuit Lending’s commitment to supporting local businesses makes it a valuable resource for entrepreneurs seeking funding.
New York State offers a range of state small business resources to assist entrepreneurs. These resources include small business development centers and entrepreneurship assistance centers that provide high-quality business consulting and support to small business owners.
Entrepreneurship assistance centers play a crucial role in fostering the growth of small businesses by offering training, counseling, and access to resources. They serve as valuable hubs for aspiring and existing entrepreneurs.
Various programs include:
You may be interested in one of the following business grant programs in New York. You can also check with your business development center for additional programs.
Here are some New York tax credits to consider for your business.
Bad credit business loans in New York can provide a lifeline for businesses struggling with poor credit scores. These loans provide access to much-needed capital when traditional lenders may turn businesses away due to their credit history. This can be crucial for businesses looking to expand, cover unexpected expenses, or stay afloat during tough times.
However, there are drawbacks to taking out a bad credit business loan. One major drawback is the higher interest rates associated with these loans, which can significantly increase the overall cost of borrowing. Additionally, some lenders may require collateral or personal guarantees, putting business owners’ assets at risk if they cannot repay the loan.
In your quest for business loans in New York, understanding the available options, industries, application process, rejection handling, and lenders is crucial. Government assistance programs can also be a game-changer for your small business. Make informed decisions to secure the best funding for your enterprise and propel it towards success.
Explore the diverse landscape of business loans in New York, tailor your approach to match your industry’s needs, and leverage all available resources to maximize your chances of securing funding. From Staten Island to Long Island, the Westchester counties, and all in between, New York State has an abundance of financing opportunities for entrepreneurs of all shapes and sizes.
Fraud Disclosure:
Please be aware that individuals have been fraudulently misrepresenting to business owners (and others) that United Capital Source, Inc. (“UCS”) can assist small businesses in receiving government grants and other forgivable business loans, when in fact those grants or loans do not exist or are not available. These individuals have ulterior motives and are engaging in the unauthorized use of the names, trademarks, domain names, and logos of UCS in an attempt to commit fraud upon unsuspecting small business owners.
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