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NYBDC.com

Each day brings us news of challenges to businesses big and small.  Real concerns about liquidity and access to capital fuel speculation about the direction of our economy and dominate discussion across all walks of life.

NYBDC was spawned in difficult times as New York searched for sources of capital for its growing small businesses; it was recognized that the inability to access credit impaired the growth of our economy and opportunity for New York’s entrepreneurs.  Since our founding in 1955, many resources for small business have developed, but our many lending partnerships and commitment to our mission is the constant that pushes us to the forefront in good times and bad.

We are certainly seeing a challenging credit environment as many of our lending partners move toward a more conservative risk profile.  Nationally, SBA activity is declining at rates significant enough for SBA to be concerned; it is active in attempts to rally banks, large and small, to increase SBA lending.  Although the most dramatic decline in SBA lending is with the SBAExpress -- which has seen declines of 27.9% in number of loans and 22.6% in dollar amount year over year as of March 28, 2008 – all SBA lending programs have seen declines in the number and dollar amount of loans.

During 2007, we approved loans totaling $220.5 million to 455 small businesses in New York State, creating or retaining 9,161 jobs.  More than 17% of the SBA supported loans approved in New York State were approved by NYBDC or our 504 affiliate (Empire State CDC: The 504 Company) – most  in conjunction with one of our many lending partners.  We are bucking the national trend and are seeing incredible demand in FY 2008 as our approvals, commitments and loan fundings are all at record levels.

In recent years, many lenders relied upon the SBAExpress Loan Program, limiting or eliminating utilization of the traditional SBA 7(a) guaranties.  Many of those same lenders now justifiably sense that the 50% guarantee provided by SBAExpress is simply not enough to mitigate the risk of loss but are reluctant to process a traditional guaranty request.  They tell us that the time, energy and effort inherent in processing the traditional 7(a) guaranty request is not worth the return.   Other lenders sense that the process of seeking payment of a guaranty in the event of a loan default is time consuming and fraught with danger for the unwary.

The maximum utilization of SBA loan programs and guaranties not only serves to encourage lenders to make the loans, but leverages those dollars with federally funded guaranties for as much as 85% of the loan.  Congress has appropriated billions of dollars in the SBA lending programs; we realize our fair share in New York only when SBA authorized lenders such as NYBDC or one of our lending partners uses these guaranties to mitigate risk on loans to small businesses. 

If we fail to make maximum use of SBA to support, sustain and grow our economy through our dynamic small businesses we pass on a valuable resource.  We should not shy away from the opportunity to leverage SBA guaranties into jobs, opportunity and growth for New York.

Our stock in trade at NYBDC is our expertise in all facets of SBA lending.  For many of our lending partners, we are their “SBA Department,” processing all SBA loan activity from origination and approval to guaranty claims – none of our lending partners have suffered a loss as the result of a repair or denial of an SBA guaranty when we were the SBA lender of record.  We intend to continue this record of expertise and excellence and invite you to work with NYBDC on 7(a) loan opportunities to provide access to capital for small businesses in your communities.