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NY Forward loan now open to businesses, nonprofits that got PPP funds

Eric Gertler, CEO of Empire State Development, the

Eric Gertler, CEO of Empire State Development, the state agency overseeing the $100 million New York Forward Loan Fund. Credit: Office of the Governor / Kevin P. Coughlin

Small businesses in New York State that received federal Paycheck Protection Program loans of $50,000 or less are now eligible for a state loan program because of a rule change announced last week.

Lenders in the New York Forward Loan Fund have been directed to reconsider applications from small businesses that were initially rejected because they had received PPP loans, said Eric Gertler, CEO of Empire State Development, the state agency overseeing the $100 million fund. Lenders also are accepting new applications.

The change comes as small businesses struggle to remain open with their PPP money exhausted. Hopes have faded that Congress and President Donald Trump will reach agreement on an additional round of PPP loans before the November elections.

The federal government’s flagship coronavirus-relief program for businesses ended Aug. 8 with banks and other private lenders making 5.2 million federally guaranteed loans worth $525 billion. However, nearly $134 billion in guarantees went unused, according to the U.S. Small Business Administration, which oversees the PPP with the Department of Treasury.

The Forward Loan Fund was launched by Gov. Andrew M. Cuomo in May and nearly 11,000 applications have been received from eligible borrowers as of Sept. 27, including 2,231 from Long Island, ESD said Monday.

Still, only a small number of loans have been made — 216 statewide, totaling about $9.6 million.

Some applicants declined the offer of a Forward loan because it comes with a 3% interest rate compared with PPP loans, which have an interest rate of 1% and may be forgiven, ESD officials said. Also, PPP loans are larger, up to $10 million per applicant, compared with $100,000 for Forward loans.

Gertler, in announcing that some PPP borrowers were eligible for Forward loans, said, "providing assistance and opportunity to — particularly to our state’s minority- and women-owned businesses — to help them reopen is essential toward revitalizing our economy and building New York back better."

At least 60% of Forward loans must go to women and minorities, and 18% is earmarked for Long Island borrowers.

Forward loans were initially meant to help businesses, nonprofits and small landlords who couldn’t obtain PPP loans. But "through discussions with lenders and applicants, it became apparent that PPP loans did not go far enough…Oftentimes PPP amounts were a fraction of what was needed and requested," ESD said.

Nearly 348,900 businesses in New York secured PPP loans, totaling $38.7 billion. The average loan was $110,929. More than 66,640 loans were made in the four congressional districts that encompass Long Island, according to a Newsday analysis of loan data. Newsday received a $10 million PPP loan in April.

This is the second major change in the eligibility requirements for Forward loans. In July, ESD said businesses and nonprofits that receive only the Advance grant of an Economic Injury Disaster Loan, or EIDL, may apply. More information may be found at

On Long Island, 54 Forward loan applications have been approved as of Sept. 27 by Community Development Financial Institutions. The loans went to 51 small businesses and three landlords, 44 of whom are women and minorities, ESD said Monday.

Career coach Trisha Kusinitz used her loan, valued at between $10,000 and $15,000, to keep open Work-Shop Babylon, a co-working space and career resource center in Babylon village. She also owns tkSolutions Coaching LLC, also in Babylon Village.

"I don’t think I would be able to continue with a physical space if I hadn’t gotten the loan," Kusinitz said last month.

To be eligible, businesses and nonprofits must have 20 or fewer employees, should have annual gross revenue of less than $3 million and be profitable. Landlords must have fewer than 50 apartments in each building and own no more than 200 apartments in total.

Borrowers have five years to pay back the Forward loan, with the first year being only interest payments of 3% for businesses and landlords and 2% for nonprofits. No collateral is required.

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Available funds: $100 million from seven banks and four foundations, including BNB Bank in Bridgehampton

Maximum loan amount: $100,000

Term and Interest rate: 5 years with 3% interest rate for small businesses and landlords, 2% for nonprofits

Loan application processors: Five Community Development Financial Institutions; local businesses and nonprofits should apply to the National Development Council and landlords to the Community Preservation Corp., both are in Manhattan.

SOURCE: Empire State Development

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