Lenders, small business leaders, elected officials and government convene to discuss implementation of Second Look program for small business applicants

ad the Small Biz Credit Summit White Paper

New York, April 20, 2010 – City Council Speaker Christine C. Quinn, Finance Committee Chair Domenic M. Recchia, Jr., and Small Business Committee Chair Diana Reyna were joined today by Congresswoman Nydia Velazquez, chair of the House Committee on Small Business, representatives of the City’s small business community, the New York Bankers Association, New York Business Development Corporation, New York City Department of Small Business Services Commissioner Robert W. Walsh, and alternative lenders to collaborate on solutions to the credit crunch facing the City’s small businesses.

Although the City is slowly pulling itself out of the recession, small businesses are still buried under the financial and credit crisis. A recent National Association of Independent Business survey found that 60 percent of the small businesses that sought credit did not receive all the credit they sought and that 5 percent of small business were discouraged borrowers who did not seek credit because they believed it was not available.

These local and business leaders convened today to discuss this very issue – and what solutions the financial industry and local government can provide in order to encourage the recovery and growth of small business in the City. The Summit was originally announced in Speaker Quinn’s 2010 State of the City address.

The meeting began with the announcement by Patrick MacKrell, president and CEO of the New York Business Development Corporation, of the creation of a New York City “Credit for Success – “Second Look” program. NYBDC, working with more than a dozen banks, has created a pool of money to provide small businesses that have been rejected for credit a second chance at loans. This “Second Look” will be combined with business counseling to identify creditworthy small businesses that are otherwise shut out of access to credit markets. Loan amounts range from $25,000 to a maximum of $150,000. Applicants must meet U.S. Small Business Administration eligibility requirements and agree to seek business counseling from the regional Small Business Development Center. The program has already been successfully implemented in other parts of the State with the support of Senator Chuck Schumer.

Moving forward, the Council will continue to work to connect small businesses with credit needs with the available resources, including government programs like EDC’s Capital Access program, NYC Small Business Solution Centers, NY State Small Business Development Centers, alternative lenders, and other partners, using the NYBDC program as a model.

“I am thrilled that the best in the business have come together for one purpose – and that is to continue helping this City grow,” City Council Speaker Christine C. Quinn said. “This Summit and the Second Look program are just further evidence that the Council will do whatever is in its power to not only lend a hand to these small businesses but create programs to ensure that this sector can stand on its own. Because without small businesses, this City would not have the economic dynamism nor charm that we all have come to appreciate.”

“The New York Bankers Association and our member banks are very excited about this new endeavor, expanding our partnership with the New York Business Development Corporation and with the City of New York to facilitate new loans to New York City’s small businesses,” said Michael Smith, President & CEO of the New York Bankers Association. “We all understand that small businesses are the bedrock of a healthy economy in our City. The Second Look program is an innovative approach to giving small businesses that have been turned down for a loan another opportunity to obtain financing.”

“For more than 50 years New York’s banks have been promoting access to capital for small business as members and lending partners of NYBDC,” said Patrick J. MacKrell, President & CEO of New York Business Development Corporation. “NYBDC channels financial support from 134 New York banks to provide the capital necessary for small businesses to start, sustain or grow and, in the process, increase employment and promote economic prosperity. The “Credit for Success – Second Look Program” which we are now extending to Small businesses in New York City provides an additional resource at a critical time.”

“Today’s summit and the new ‘Second Look’ program are exactly the type of innovative approaches we need to get capital flowing again to New York City’s entrepreneurs, so they can create jobs,” said Rep. Nydia M. Velázquez (D-NY), the Chairwoman of the U.S. House Committee on Small Business. “Legislation that Congress passed last year has already helped spur $200 million in loans to New York City’s small businesses, but, still, more must be done. Helping small firms access affordable credit is essential for economic recovery and requires creative solutions at both the federal and local levels.”

“Small businesses will be at the tip of the shovel that digs out of this down economy, but only if we can get them the resources they need, and prevent the credit crunch from strangling their efforts to expand,” said U.S. Senator Charles E. Schumer. “It’s why I have been promoting this program throughout New York State. The Credit for Success – Second Look program gives businesses, which during normal times would have had access to credit, the tools they need to grow and continue to be the backbone of the economy and the force behind our economic recovery. I am excited that it has now expanded to New York City.”

“One of the biggest hurdles small business owners are facing today is access to credit,” said Council Member Domenic M. Recchia, Jr., chairman of the Finance Committee. “As a small business owner myself, I know how difficult it can be, and that’s why the Second Look program is so important. We’re very excited to host this forum with small business owners, bankers, alternate lenders and government agencies, so that we can put our heads together and come up with ideas that will ensure the long-term success of our economy.”

“The fuel that keeps New York City running are the dreams of entrepreneurs from Arthur Avenue in the Bronx to Victory Blvd in Staten Island and the South Side of Brooklyn,” said Council Member Diana Reyna, Chair of the Small Business Committee. “From today’s focus on access to capital to tomorrow’s hearing on a Bill of Rights to protect businesses from excessive bureaucratic hurdles, this Council, under Speaker Quinn’s leadership is acting aggressively to support the people who will step away from the safety of cubicles to create New York’s future.”

“Small businesses from all across the City turn to our NYC Business Solutions Centers to obtain the financing they need to start, expand and operate,” said Department of Small Business Services Commissioner Robert W. Walsh. “We will do everything possible to connect New York City businesses and entrepreneurs to the right lenders whether they are banks, credit unions, or alternative lenders. I thank Speaker Quinn for convening so many stakeholders to engage on this opportunity and for her continued dedication to small businesses.”

“The Brooklyn Chamber and our members are pleased that Speaker Quinn is tackling such an important issue on behalf of the small business community,” said Carl Hum, President & CEO of the Brooklyn Chamber of Commerce, who was an early proponent of convening today’s meeting “It is worth repeating that small business growth has traditionally led us out of the recession and into recovery, and access to credit is vital to that growth and expansion.”

“I want to give credit to Speaker Christine C. Quinn for her work in helping small businesses that are having such a hard time get funding,” said Lenny Caro, President & CEO of the Bronx Chamber of Commerce. “I think Second Look gives these small business owners a Second Chance. And this program is exactly what we need so we don’t lose any more small businesses in New York City.”

“The Staten Island Chamber of Commerce applauds the Speaker for bringing together businesses, banks and legislators in an effort to increase access to credit for small businesses. This summit is an important step in reopening the flow of capital that many struggling businesses so desperately need,” said Linda Baran, President & CEO of the Staten Island Chamber of Commerce.