1. A
ntonio Rivera IV,
owner of Bronx-
based New Look
C on st r uc t ion
Maintenance, won a contract
early last year from the city’s
Department of Homeless
Services that 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,” recalled Mr. Rivera,
who began his company four
years ago. “But the cost of ma-
terials alone was going to take
getting a loan, and since Hur-
ricane Sandy the credit crunch
has made getting these loans
very, very tough.”
The de Blasio adminis-
tration is trying to do some-
thing about that. As part of
a new $3.5 million loan pro-
gram that the Department of
Small Business Services is set
to announce this week, com-
panies like Mr. Rivera’s will
potentially have an alternative
short-term financing source,
allowing them to get to work
faster and continue to grow in
a challenging lending environ-
ment.
All of the money is pri-
vate, most of it from Goldman
Sachs’ 10,000 Small Business-
New loan fund to aid small
city contractors
A new alternative stream of private financing will allow fledgling
construction firms to get started on jobs they win from the city.
BY THORNTON MCENERY
FEBRUARY 11, 2014
es program, which is commit-
ting $2.8 million to a mobi-
lization loan fund for small
construction businesses. It will
be augmented by $700,000
from the Surdna Foundation.
BOC Capital Corp., a non-
profit financial institution
that specializes in community
development, will manage the
fund over the next three years,
making low-interest, one-year
loans in the range of $20,000
to $150,000 to small firms that
have secured New York City-
based contracts but are having
difficulty finding financing to
proceed.
“This funding is very much
aligned with the aim of our
program,” said Cristina Sha-
piro, vice president of the
Urban Investment Group at
Goldman Sachs, which oper-
ates 10,000 Small Businesses.
“We are very excited that this
money is going to reach a crit-
ical subset of small businesses
in New York City.”
For Small Business Services,
the fund means that there is a
ready partnership available to
help small construction busi-
nesses pay for contract-relat-
ed labor and equipment costs,
something that has been par-
ticularly difficult to achieve
for companies involved with
the city’s Build it Back pro-
gram, which is supposed to
help homeowners rebuild after
Hurricane Sandy.
Contractors like Mr. Ri-
vera have waited up to seven
months for payment from the
city on Build it Back con-
tracts. For smaller companies
like his, the delay can be per-
ilous and is a growing cause of
concern for the future of the
program. By creating a quick-
er stream of bridge financing,
the new Small Business Ser-
vices fund could make Build
it Back more appealing to con-
tractors.
“We are excited that the
Department of Small Busi-
ness Services partnered with
the private sector to help lo-
cal businesses take advantage
of available Sandy recovery
projects,” the Build it Back
program’s director, Kathryn
Mallon, said in a statement.
“Helping the local economy
while we rebuild is a win-win.”
A resurgent Build it Back
would surely be welcomed by
new Deputy Mayor for Hous-
ing and Development Ali-
cia Glen, who was until last
month the head of the very
same Goldman Sachs urban
investment group that is seed-
ing the fund. Officials at the
investment bank told Crain’s
that Ms. Glen was not person-
ally involved in the planning
of the loan, but she was aware
of it.
According to the Depart-
ment of Small Business Ser-
vices, BOC Capital will work
closely with applicants, whose
eligibility hinges on a few fac-
tors. Companies must be au-
thorized to do business in the
city, be at least two years old,
and have two or more employ-
ees and a clear plan for growth.
They must also have annual
revenues between $100,000 to
$7 million and be in posses-
sion of a secure construction
contract.
For small businessmen like
Mr. Rivera, the new funding
stream has already paid off.
Not only has he moved on his
city building contract with a
loan from BOC Capital, he
has repaid the loan in full.
“The people at BOC sat
with me and got me what I
needed,” he said. “They are
now very important people in
my life.”