Credit Unions Allowed to Participate in the New York State Business Loan Program
New York State credit unions are now allowed to participate in its Excelsior linked deposit program.
Governor Kathy Hochul signed the law on October 24.
The program allows businesses to take out commercial loans at an interest rate 2-3% lower than the going rate. Borrowing becomes cheaper for small businesses, and lenders are compensated for providing low rate loans with a comparatively reduced deposit of public funds.
Thanks to the program, the government deposits a down payment of the same amount as the loan taken out and earns less interest on the deposit. The lending institution then transfers the savings on the interest rates to the borrower.
The program was originally created as an economic development initiative to encourage small businesses to undertake new projects and make new investments in their businesses.
By adding credit unions, the state intends to expand access to even more small businesses, especially in communities underserved by commercial banks.
“For too long, too many places in NYS were banking deserts, yearning for proper attention to help them grow,” said Senator James Sanders Jr. “By signing this bill, the governor unleashes power credit unions to help the unbanked Thank you to Governor Hochul for signing this bill that supports dignified but unbanked communities. “
Manufacturing companies with 500 full-time employees or less in New York State, or any independent and independent service company with 100 full-time employees or less in New York State that is not dominant in its field is eligible for a 2% interest rate bonus under the program, as well as any business with 100 or fewer full-time employees based in New York State that undertakes a project to increase its business in the area of New York State. ‘export.
Companies eligible for a 3% interest rate subsidy under the program include those with 100 full-time employees or less in an Empire zone or hardship zone, certified minority-owned or owned businesses. to women, defense manufacturers, agricultural companies with 500 or fewer full-time employees, and technology or innovation companies with 100 or fewer full-time employees based in New York City.