DiNapoli Allocates Additional $100 Million For Loans To New York State-Based Small Businesses
The New York State Common Retirement Fund (the Fund) allocated an additional $100 million to the New York Business Development Corporation to make loans to small businesses based in New York State, State Comptroller Thomas P. DiNapoli announced today at a news conference in Syracuse.
“New York’s small businesses are a vital part of the state’s economy,” DiNapoli said. “Working with the New York Business Development Corporation, we are investing an additional $100 million in the state’s small businesses. Small businesses are smart investments that provide solid returns for the pension fund. By providing loans to help local companies get off the ground and expand, we can do well for the members of the Retirement System while at the same time do good for New York’s small businesses and most importantly New York’s economy.”
The latest allocation is the fourth investment agreement the Fund has made with NYBDC to support small business in New York State since 1987, bringing the total allocation to $400 million. NYBDC makes loans to New York State small business borrowers for working capital, equipment or real property needs. NYBDC partners with the Small Business Administration to make these loans, in some cases to borrowers who would otherwise not have access to loan capital.
“The pace and depth of the economic recovery will be determined by small business,” Pat MacKrell, president and CEO of the New York State Business Development Corporation, said. “The additional commitment announced today by Comptroller DiNapoli facilitates that recovery by providing the leveraged capital to NYBDC which in turn can be loaned to credit-worthy small businesses that are unable to access capital from conventional lenders while also providing a good rate of return for the Fund. It’s a win–win for New York State and a clear statement recognizing and supporting diversity and opportunity.”
Using the Fund’s capital, NYBDC has invested $264 million in 892 small businesses since 1987. This capital investment has helped New York State businesses retain or create more than 18,000 jobs.
“Small business drives job creation across New York and across the nation,” said Robert M. Simpson, president of the CenterState Corporation for Economic Opportunity (CenterState CEO). “The New York State Common Retirement Fund and NYBDC's small business loan fund provides the capital small firms need to grow and be successful. In turn, these businesses create a stronger economic climate for the entire region.”
NYBDC has a strong commitment to women and minority owned businesses, with a target of 25 percent of their loan portfolio to women and minority borrowers. In the last five years, more than 35 percent of loans disbursed went to minority or woman-owned businesses. NYBDC also has a lending program targeting military veterans, which has made more than $1 million in loans.
The investment rate of return to Fund is based on comparable Treasury investments and has provided a strong return to the Fund. As of March 31, 2010, NYBDC has a ten-year rate of return of 6.5 percent.
About the Common Retirement Fund
The New York State Common Retirement Fund is the third largest public pension plan in the United States with more than one million members, retirees and beneficiaries from state and local governments. The Fund has a diversified portfolio of public and private equities, fixed income, real estate and alternative instruments.
About New York Business Development Corporation
NYBDC’s mission is to promote economic activity within New York state by providing innovative loans to small and medium-size businesses; to assist its partner banks in making such loans; and, particularly, to assist minority and women-owned businesses by offering credit opportunities not otherwise available to them.