Many Small Businesses, Non-profits, and Landlords May Qualify for Up to $100,000
Pre-applications for the New York Forward Loan Fund are available now with priority going to industries and regions that have already reopened.
With over $100 million in NY State loans available, this is exciting news for qualifying landlords, not-for-profits, and small business entrepreneurs impacted by COVID-19 related financial issues.
Processing will begin on June 1, but it’s important to note that this is not a “first-come, first-served” program, with the state emphasizing that applications will be reviewed on a rolling basis as industries and regions across the state reopen.
“NYFLF has been established with the goal of providing affordable working capital loans to severely impacted businesses over the coming months,” the state’s website reads.
“There is an initial funding of over $100 million, with 5% reserved for nonprofit organizations, 30% reserved for small landlords, and 65% reserved for small businesses.”
Substantial Share For NYC & LI
About 30% of the $100 million in New York state loans has been allocated for New York City, with 18% for Long Island.
The state capped all of the initial round of NY Forward Loan Fund loans at $100,000 and some applicants may only qualify for a lower amount, based on specific criteria. You are only eligible if you did not receive an SBA PPP loan or an Economic Injury Disaster Loan (EIDL), and must have 20 or fewer full-time equivalent employees.
Below, we explain which groups qualify for these loans. Complete information is available at the New York Empire State Development website and applications are available now.
If you decide to apply and find yourself confused during the application process, our team is here to help explain the process to you in clear, easy-to-understand terms.
Who Qualifies?
Small Businesses. First, to qualify for this program they must have gross revenues of less than $3 million a year.
Based on their average monthly revenues for any three-month period in 2019, or for January through March of 2020, they can borrow either “the lesser of $100,000 or 100% of their average monthly revenues.”
Small Landlords are defined as owning fewer than 200 units (no single property can have more than 50 units) in low or moderate income census tract neighborhoods or owning properties that meet a specified rent test.
Properties must be in good repair with no major violations and landlords must show positive cash flow for the 12 months leading up to the loan.
Similar to the other guidelines, they can borrow the lesser of up to $100,000 or the projected reduction in three months (net) operating income based on reductions in NOI for April or May 2020.
Among other criteria, these landlords also must show they have:
- Not missed a debt service payment in a year or have no active mortgage;
- Paid all property taxes due through March 2020;
- Mortgages not subject to an active 78forbearance agreement.
Non-profits must be registered 501(c)(3) organizations.
Faith-based organizations also may qualify as long as the funding is not used to support religious worship or related activities.
Again, based on their average monthly revenues for any three-month period in 2019 or for January through March of 2020, these organizations can borrow either “the lesser of $100,000 or 100% of their average monthly revenues”; annual operating budgets must be lower than $3 million a year.
In addition, qualifying faith-based organizations and non-profits must provide direct services to New Yorkers, including food banks/meal delivery, senior services, daycare, and legal aid.
A Great Opportunity, But No Guarantees
Organizations that pass the initial screening will be asked to provide additional information and documentation.
The guidelines stress that, “submitting an application is not indication of eligibility or that funding will be approved.”
NY State’s website states that “A participating Community Development Financial Institution (CDFI) lender will reach out to the loan applicant to collect the required documentation, conduct any credit checks, and finalize the application review process.”
For small businesses that pass the initial screening, applications will likely require more information and collateral materials, including Executed Attestation Form (to be provided by lender), a brief description of COVID-19 impacts on jobs and revenues, evidence of legal formation of business entity (articles of incorporations and/or bylaws); and, if applicable, even a personal credit report.
Non-profits will have to provide a range of documentation, including “Most recent audited or reviewed financial statements,” (again, as applicable), and most recent internal financial statements, if available, evidence of legal formation of nonprofit entity (articles of incorporation and/or bylaws), as well as board approval and resolution.
Landlords will probably be asked to submit a hardship letter specifying COVID-19 impacts on jobs and revenues, a property rent roll showing economic impact; evidence of legal formation of business entity (articles of incorporation and/or bylaws); and an executed attestation form (to be provided by lender), among a number of other documents.
Apple Bank, BNB Bank, BlackRock Charitable Fund, Citi Foundation, Evans Bank, Ford Foundation, M&T Bank, Morgan Stanley, Ralph C. Wilson, Jr. Foundation and Wells Fargo are among banks and financial institutions supporting the New York Forward Loan Fund.
You can begin the pre-application process to receive your share of the available $100 million in New York State loans today. If you would like our assistance, reach out by email or call (212) 279-9800 to schedule an appointment.
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