Phil Henderson | President | The Surdna Foundation

Small businesses—especially those owned by people of color, women and immigrants—all too often lack the financial track record and the flexible capital needed to win contracts for infrastructure investments and other urban development efforts. Local businesses can and do win public and private contracts, but we want to increase the numbers and diversity of businesses that are able to participate in these bids. This requires that the right conditions be in place, including policies that support business growth, loan products with flexible underwriting standards, and business development and marketing assistance. 

boc loan

Ensuring that businesses owned by people of color, women and immigrants are well represented among those who benefit from these contracts is essential to fostering just and sustainable communities.

We’re working to dismantle some of the barriers that limit a business’s ability to thrive and grow. And the timing for this effort is just right, as New York City’s response to Hurricane Sandy has created a number contracting opportunities with rebuilding efforts like the City’s Build It Back program.

Together with a group of partners including the New York City Department of Small Business Services, Goldman Sachs 10,000 Small Businesses, and BOC Capital Corp, we’ve created a loan program to ease access to short-term loans for New York City-based minority- and women-owned contracting firms and other small businesses. 

If you’re a small business owner who has just been awarded a contract, you’d think that bidding for and winning the contract is the toughest part. But without the short-term working capital to hire additional workers, buy equipment and materials, you can’t start—much less complete—your contract.

In a recent Crain’s New York Business article about the loan fund, Antonio Rivera IV, a Bronx-based owner of a construction firm, talks about how he thought the city contract he was awarded was going to be a game-changer for his small business. But there was one major problem:

This was a huge job for me, and my bid won it fair and square. But the cost of materials alone was going to take getting a loan, and since Hurricane Sandy the credit crunch has made getting these loans very, very tough.

Many owners of small businesses like Antonio Rivera IV face similar borrowing challenges—challenges that are even greater when these businesses are minority or women-owned and work in low-income communities. Often, despite solid work records, due to low owner net worth, or unestablished credit ratings, they typically encounter far higher borrowing costs, or are unable to get loans at all.

Surdna is making a $700,000 Program Related Investment in BOC Capital Corp, a Community Development Financial Institution which provides loans to help grow New York City-based small businesses, with a particular emphasis on women-, minority-, and immigrant-owned businesses.  Our investment supports the $3.5 million loan program of which Goldman Sachs will provide up to $2.8 million. We’re also providing a $480,000 grant to BOC Capital to help them administer the loans and offer an increased level of support to help small businesses through the loan process. See more about the details of the Loan Fund.

We’re hopeful that by accessing the Loan Fund, contractors can have a powerful amplifier effect when their businesses create quality jobs in low-income communities and communities of color. 

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