City Hall – City Council Speaker Christine C. Quinn announced today a first of its kind collaboration between the New York City Department of Small Business Services (SBS) and Enhanced Capital, a national asset management firm with a proven track record of small business lending, to target investment to small businesses in New York City’s low income communities to allow these businesses to create jobs.
SBS and Enhanced Capital have entered into an MOU pursuant to which SBS and Enhanced Capital intend to work together to use Federal New Markets Tax Credits to fund small businesses. This Federal program is designed to use tax credits to incentivize the investment of private capital into low-income communities, but the program has typically been used to finance real estate construction. Speaker Quinn, along with Council Member Inez Dickens, first announced in her 2012 State of the City address that she was working with the City’s Department of Small Business Services to bring non-real estate NMTC-backed investment to NYC’s small businesses. The combined efforts of Speaker Quinn and SBS have led to the current collaboration wherein Enhanced Capital featured NYC small businesses in need of capital in its New Markets application to the US Department of Treasury’s CDFI (Community Development Financial Institution) Fund.
With this new collaboration, we can help a moving company buy more vans and hire more movers, or a local restaurant open a second location and create new jobs.
Enhanced Capital intends to use its small business lending expertise to make investments in amounts ranging from $500,000 to $2 million to qualified NYC businesses located in low-income areas. Enhanced Capital will target the use of $10 million of any New Markets Tax Credit allocation to benefit city businesses. SBS will leverage its extensive expertise in providing financing assistance to local businesses to help Enhanced Capital build a pipeline of potential investments. In 2011, SBS facilitated nearly $39 million in financing awards to small business through the NYC Business Solutions Centers located throughout the five boroughs.
“Many small businesses in New York City have a problem getting access to credit, and this unique collaboration intends to address this issue. Our efforts help a moving company buy more vans and hire more movers, or a local restaurant open a second location and create new jobs.
So this year I’m announcing that we’ll be partnering with Council Member Inez Dickens, Economic Development Corporation President Seth Pinsky, and Small Business Commissioner Rob Walsh. We’ll create a $10 million dollar small business loan fund exclusively for businesses in high unemployment neighborhoods. And the best part is, it won’t cost the city a dime.”
“Accessing capital is one of the biggest challenges facing small business owners,” said Rob Walsh, Commissioner of the NYC Department of Small Business Services. “Last year, NYC Business Solutions helped connect small business owners to nearly $39 million in capital, but we can do even better. Partnering with Enhanced Capital is another step we are taking to continue to help small businesses get the loans they need to succeed and grow.”
“The CDFI Fundis encouraging the use of New Markets to make innovative working capital loans in amounts less than $2 million to small businesses,” said Richard Montgomery, Managing Director of Enhanced Capital. “We are excited to leverage Enhanced Capital’s small business lending expertise with the significant resources of the NYC Department of Small Business Services to use New Markets to create jobs through small business lending.”
About Enhanced Capital Partners, Inc.
Enhanced Capital Partners, Inc. is a diversified, national private investment firm specializing in investments in small and mid-sized companies. Since 2000, ECP has raised over $500 million through a variety of state and federal public-private investment programs. Enhanced Capital and is headquartered in New York City.