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New York Forward Loan Fund


As New York state businesses gradually reopen, the state has announced the New York Forward Loan Fund. This s a $100 million loan initiative aimed at small businesses, nonprofits and small landlords that have suffered financially due to COVID-19 closures. According to Governor Cuomo, small businesses comprise 90% of the state’s businesses, and “are facing the toughest challenges.”

To be eligible for a loan, a small business must have 20 or fewer full-time employees, have annual gross revenues of less than $3 million, have been in business for at least one year, and be located in New York state. The business must not have received either a federal SBA Paycheck Protection Program (PPP) loan or a federal SBA Economic Injury Disaster Loan (EIDL) for COVID-19 in 2020. The business must have suffered a direct economic hardship as a result of COVID-19 related social distancing policies and/or stay-at-home orders that have materially impacted their operations. Certain businesses, such as corporate-owned franchises, night clubs and liquor stores, are not eligible for the loans.

The amount of each loan will be the lesser of $100,000 or up to 100% of the business’s average monthly revenues in any 3-month period from 2019 or first quarter of 2020. There are no application fees, and no collateral is required. The loans will not be interest-free; the fixed annual interest rate for small businesses will be 3%. Nor will the loans be forgivable – they will be payable over 5 years. During the first year, only interest must be paid, while in years 2-5, principal and interest will be due.

The loans must be used for working capital, inventory, marketing, refitting for new social distancing guidelines, operating and emergency maintenance, property taxes, utilities, rent, supplies, etc. The loans may not be used to refinance an existing loan. Applicants will be required to detail their anticipated use of the loan funds as part of the application process.

According to the Empire State Development, the agency overseeing the program, this is not a first-come, first-served loan program. Instead, applications will be reviewed on a rolling basis as regions and industries reopen. The state has put in place “geographic proportionality goals” for the distribution of the loan funds. New York City businesses are to receive 30% of the funds, while the Long Island region and the Hudson Valley are to receive 18% and 12% respectively.

The pre-application process opened on May 26, 2020. Small businesses that are in industries and regions that have not yet reopened are encouraged to prepare a pre-application in advance. Further information can be found here.

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