Establishing a small business is a daunting task given that it requires significant time and effort to get it right from the start.
However, when business ownership is done correctly, it can be an equally liberating and lucrative path. Small businesses are often referred to as the backbone of the U.S. economy because they provide a large portion of available jobs throughout the country, and allow owners to live out their desires of freedom away from the traditional workforce. However, creating a small business is hard work, especially in the realm of small business financing.
In the state of New York, small business owners are in luck as far as the available financial resources to which they have access. Simply by operating your small business in the state, you may qualify for financing that can make all the difference in keeping the doors open. New York small business financing typically comes in the form of small business loans, grants, and outside investments, all which require companies to meet specific eligibility guidelines before financing is offered.
Read on to find several resources for small business loans, grants, and investors throughout New York state that can help your company grow.
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Small Business Loans in New York
Small businesses in New York may receive financing through conventional loans. Many different financial institutions offer small business loans to qualified companies, in various amounts, and with different repayment terms.
Bank loans for businesses can be a challenge to qualify for, as they are dependent on the financial strength of the company and, in some cases, the personal credit history of the business owner. Here are a few small business loans provided in New York.
BFS Capital offers small business loans to companies operating in the state of New York. Loans provided by BFS Capital are term loans, which means they have a fixed repayment schedule and a set interest rate. Small businesses may qualify for up to $1 million, based on the time they have been in business, the assets of the business, liabilities, current and expected revenue, and the industry in which the company operates. Applications for BFS Capital small business loans are available either over the phone or online.
Suffolk Federal Credit Union
Another small business loan provider is Suffolk Federal Credit Union, offering small business term loans to qualified companies in Long Island. The credit union provides fixed-term loans with repayment extending up to seven years, with either fixed or variable interest rates. The loan maximums offered by the credit union are dependent on the company’s revenues, assets and liabilities, and business credit history. Applications for small business loans with Suffolk Federal Credit Union can be submitted either in person at a branch location or online.
Small businesses may also have an option for a new bank loan with Quontic Bank. The New York-based financial institution offers term loans as well as business lines of credit for as low as $5,000, with repayment terms ranging from one to seven years. The bank also provides SBA loans for eligible small businesses. Interest rates and total costs for a small business loan with Quontic Bank vary based on the financial stability of the business. Small businesses may inquire about a new loan with the bank online, by email, or by phone.
Metropolitan Commercial Bank
Metropolitan Commercial Bank provides small businesses with term loans between $50,000 and $250,000. Small business loans through the bank may be used for a variety of needs, including equipment purchases, inventory, or expansion. Metropolitan Commercial Bank determines the repayment schedule and the interest rate of new small business loans based on the creditworthiness of the company applying. More information about small business loans can be found on the bank’s website.
Small Business Grants in New York
Small business grants are often the most sought-after type of financing in New York and other states because the funding received is not required to be repaid. Instead, a small business grant is funded by a state, nonprofit, or private organization to qualified businesses in a set amount, and so long as the money is used for the specific purpose laid out in the grant proposal, the business does not owe it back to the funder.
Grants, however, are highly competitive and require a heavy dose of business know-how and grant-writing skill in order to get noticed by grant-funding organizations. Here are several small business grant opportunities for companies located in New York, along with grant amounts where available, deadlines, and eligibility criteria.
Regional Council Capital Fund Program
The Regional Council Capital Fund Program is part of the Empire State Development organization in New York. Its grant program provides capital for economic development initiatives that create or retain jobs, prevent or reduce unemployment and underemployment, and increase business activity in a specific New York community or region. Businesses may utilize grant funding for a myriad of purposes, including leasing land or buildings, new construction or renovation, purchasing furniture or fixtures, or planning and feasibility studies relevant to a capital project. Small businesses in New York may submit an application through the Empire State Development office.
Start-Up NY Program
Also part of the Empire State Development agency, Start-Up NY is a grant program specifically geared toward new and expanding small businesses. Unlike other grant financing opportunities, this program offers funding through tax-based incentives and academic partnerships. Businesses awarded financing from Start-Up NY have an opportunity to operate tax-free for up to 10 years, on or near an eligible university or college campus in the state. More information about business eligibility and total financing available can be found online. Applications are also submitted through an online platform.
InnovateHER Grant Program
While not specific to New York small businesses, InnovateHER Grant Programis a great opportunity for women entrepreneurs operating in the state. Through a partnership with the Small Business Administration, InnovateHER is a grant competition meant to empower women who develop products or services that have a measurable impact on the lives of other women and families, a potential for commercialization, and fills a specific need in the marketplace. Awards up to $40,000 are available. More information about the grant competition may be found online.
Community Facilities Direct Loan and Grant Program
In partnership with the USDA, the Community Facilities Direct Loan and Grant Program offers financing to assist small businesses in New York in developing essential community facilities in rural areas. Financing may be used to purchase, construct, or improve a community facility, including healthcare, public, support services, educational services, or food services facilities. Both grants and loans are available to eligible businesses. More information about the program, including deadlines, total funding available, and application requirements can be found online.
The National Association for the Self-Employed, or NASE, offers grant financing to New York-based businesses, worth up to $4,000. Small business grants provided by NASE may be used to finance a specific business need, like purchasing inventory or equipment, hiring part-time help, designing marketing campaigns, or creating a website. Small businesses qualify when they are members of the national organization. Applications are submitted online, and awards are announced several times throughout each year.
Small Business Investors in New York
Another method of securing financing for your small business in New York is investment funding. Outside investors, including seed and angel investors, and venture capitalist firms, focus on providing necessary capital for high-growth or highly impactful small businesses. There are several investment firms focused on businesses operating in New York, with some of the more notable organizations listed below.
Tri State Ventures
Tri State Ventures is a seed and angel investor group offering financing to companies with high growth potential in their markets. Business sectors range widely, from healthcare and information technology to energy and consumer products. The angel investment firm is well known for its early-stage financing, and has helped several New York businesses expand exponentially since its start in 1999. Small businesses may gather more information about the investment firm and determine eligibility online.
Another New York-based angel investment firm is Golden Seeds, a unique organization that focuses on early-stage investment for women business owners. Golden Seeds has assisted more than 145 companies with early-stage funding, investing more than $100 million since its inception in 2005. The investment firm does not limit its financing to specific sectors, but it does consider companies with high growth potential in technology more so than other businesses. Information about the angel investors, funding, and application process can be found online.
Union Square Ventures
Small businesses in New York may also seek financing through venture capital firm, Union Square Ventures. The New York-based investment firm focuses on high growth potential companies mainly in the technology field, and it has made more than 170 investments across several different verticals. The venture capitalist firm has also succeeded in generating four initial public offerings and more than 15 acquisitions of the companies it supports. Small businesses may find out more about Union Square Ventures online.
Getting Your Business Ready for Financing
Businesses operating in New York have several options for financing through grants, bank and credit union loans, and investment firms. However, each type of funding requires some preparation before submitting an application.
Grant opportunities require companies to put together a strong proposal that often includes a business or project plan, a detailed timeline for completion, impact on the community or region, and realistic budget. Bank and credit union loans have more stringent qualification criteria in that small businesses must have the last one to two years of financial records on hand, and organized, as well as a detailed listing of assets and liabilities. Business credit history and personal credit score may also be evaluated as part of the small business loan application process.
For investment financing, companies must have a detailed pitch deck, or business plan, revenue, profit and loss details, and information on other outside investments. Taking the time to prepare these documents and details is essential to securing business financing.
What Kind of Financing Do You Need?
Not every small business needs the same type of financing, nor will they qualify for funding from each source. Companies that have a social, environmental, or civic impact on the community may be best suited for grant financing; however, grants come with guidelines which must be met in order to sustain funding over time.
Small business loans are often best for companies that have the ability to repay any borrowed funds over the course of several months to several years. Bank and credit union loans are only available, though, to small businesses with strong financial standing and a history of generating revenue.
For investment financing, small businesses must be in a high-growth field and be willing and able to increase revenue exponentially after receiving investor funding. It is also important to recognize that outside investments require some loss of control over day-to-day business operations, as well as diluted equity in the company over time.
Interested in taking out a personal loan to bootstrap your business? Check out our guide to Getting a personal loan in New York.