Overview of Small Business Funding Options in New York
Updated: Jan 24
Small businesses account for more than 98 percent of private-sector businesses in New York State. They also produce more than 50 percent of the total private-sector jobs in New York, employing more than 4 million New Yorkers. Small businesses are the economic engines that power the economies of both New York State and its most significant metropolitan areas.
Small businesses often need a line of credit to expand their operations, hire new employees, purchase new or replace outdated equipment, or for a wide variety of other purposes. The options for obtaining small business financing can be overwhelming at times for business owners to assess and compare. There is no definitive guide for potential New York State borrowers as to what form of financing or which loan program is right for the business or its owner(s).
Depending on what state or even city that a potential borrower is in, the loan requirements, as well as the financing options for the borrower, may be entirely different than for a borrower in similar circumstances. It can be true both for the actual types of financing available for potential small business borrowers as well as the actual loan application forms and documents. It includes what information has to be provided along with the application to be processed.
Sometimes states may have requirements for applying and qualifying for financing that differs from the more prevalent national guidelines and requirements for small business financing programs. New York is one such state.
Although federal Small Business Administration (or SBA) financing is available to small businesses in New York, several state programs provide funding to small businesses in New York City and New York State as well. Many of these programs have different qualifying criteria and application requirements compared to SBA loans, and as a potential borrower, you'll be required to submit more records.
Financing for small businesses in New York typically comes in the form of loans, grants, and outside investments that are tailored to small businesses. All of those forms of funding may require companies to meet specific eligibility guidelines and/to provide particular information and documents before financing. Different types of funding options are available through these programs throughout New York State for a wide variety of different sized businesses in various industries.
If your small business does not qualify for a government program or business line of credit through any of the state or local programs in New York, there are still plenty of excellent funding options available for you. Financing options are available from a merchant cash advance funder like us or another type of business line of credit. Regardless of the reason or amount that a small business may need for financing in New York, there are plenty of choices that make sense for you and your small business.
State and Local Resources for Small Businesses in New York
New York State has some excellent resources for small businesses and small business owners. One of the main ones is for business owners in need of either expert insight or guidance from mentors experienced in starting and managing small businesses. The mentor can also help small businesses access various forms of financing or obtain financial assistance for many different purposes.
New York State and its agencies and municipalities offer several different financing programs through multiple various state agencies. New York State’s Small Business Development Center (NYSBDC) is a state agency whose sole mission is to help small businesses in the Empire State. NYSBDC has several excellent resources for small businesses in need of financing, expert guidance, and other forms of assistance. The NYSBDC has 23 regional service centers that are on college campuses (both public and private) throughout the state. Since 1984, it has assisted more than 450,000 state residents, funneled $6.7 billion to start or expand small businesses in the state, and created/saved more than 200,000 small business jobs in New York. The state’s New York Business Express offers all sorts of resources for small businesses and other private companies in the state to help them grow. They receive the tools to successfully face different challenges that occur to every small business at different stages in its life-cycle.
Specific New York Financing and Grant Programs for Small Businesses
Empire State Economic Development Fund
The Empire State Economic Development Fund (EDF) offers financial assistance for projects and businesses that can serve to promote the economic health of New York State by creating or retaining jobs or increasing business activity in New York State. Eligible projects for the EDF include businesses involved in industrial, manufacturing, warehousing and distribution, and companies engaged in research and development, high technology, service, and other non-retail commercial enterprises. Funds from this program can be used for purposes such as real estate and land acquisition, construction, and renovations, site and infrastructure purchase or development, the purchasing of machinery and equipment, or construction-related planning and design.
Start Up NY
Start Up NY is a state program that's geared toward new and expanding businesses. The program offers eligible new and expanding businesses the chance to operate tax-free for 10 years on or near several eligible university or college campuses in New York State. Eligible projects are required to create new jobs or contribute to the economic development of the local community.
The Differences When Applying for State or Local Grants, Loans or Financing Versus More Mainstream Small Business Financing
Apply for financing through state or local programs like the programs described above can be different from applying for conventional financing through an SBA lender or financial institution. Many state and local programs have different requirements and goals than a mainstream SBA lender may have. Therefore, a small business applying for many of the programs described above may be asked to provide different sorts of documentation than would ordinarily be the case. For example, if a business wishes to apply for the Start Up NY program, then the actual application process takes place through the participating local university or college. Similarly, some grant or financing programs may require that a small business applicant or borrower provide detailed information regarding hiring plans to encourage the hiring of minority candidates or historically disadvantaged socioeconomic groups.
State programs often have different goals compared to more traditional small business lenders, which are just looking at potential borrowers that can pay back the loans and are a reasonable credit risk. For example, New York State, like the federal and many other state and local governments, has specific contracting requirements that encourage government entities to award contracts to minority or women-owned small businesses or other historically disenfranchised groups. These programs are specifically meant to help members of those groups to start new businesses or expand existing businesses.
Finally, certain types of businesses may not be eligible for state or local programs in New York State. For example, financing through the Empire State Economic Development Fund program is not available to medical, legal, nursing, or retail businesses. Start Up NY is not open to retail, restaurants, hospitality business, personal services businesses, medical, dental practices, or finance or financial services.
Although small businesses in such industries would likely be eligible to apply for financing through mainstream small business lenders, these programs were set up to benefit borrowers and small businesses in other industries or sectors. Obtaining funding through state or local government programs can be a great source of financing for eligible companies, but as described in greater detail below, it is far from the only option in New York State.
Other Financing Options
Even if your small business does not qualify for any particular grant or financing program described above and offered by New York State, there are still plenty of excellent financing options often available to small businesses in need of financing.
Alternative lenders such as us, Velocity Capital Group, offer Merchant cash advances as a financing option. This type of funding enables you to expand your business’s operations, hire new employees, obtain additional equipment, or any number of other purposes that assist your small business in improving its development. Perfect for short term funding, if you have a small business in New York and you require financing, this is one of the best options for you.
Our advances allow you to receive your funds much faster than traditional banks will offer. We're able to fund bad credit, provide the amount quickly, be flexible with the repayment terms, and can reinvigorate your working capital to keep your business running smoothly.