A new $7 million loan fund for small- and medium-sized businesses in the Buffalo Niagara region is being launched with funding from JPMorgan Chase.
The loan fund will be administered by the National Development Council, through its Grow America Fund, in conjunction with officials from the Erie County Industrial Development Agency, the Buffalo Urban Renewal Agency and the City of Niagara Falls.
The fund will provide low-interest loans to existing small businesses as part of an effort to spur economic growth and job creation in low- and moderate-income communities across the country. The funding for the Buffalo Niagara loan program is part of $33 million that JP- Morgan Chase is providing for loan funds in Buffalo, Denver, Chicago, Seattle and the New York City metro areas.
The loans are available for qualified businesses in Erie and Niagara counties that have been operating for at least three years and have between two and 500 employees. The loans can range in size from $150,000 to $2.5 million, depending on the project and the financial status of the company. The terms of the loans often are more flexible and the interest rate lower than those offered through conventional loan programs.
“We’re looking to fund healthy, growing companies that just have had difficulty gaining access to long-term capital,” said Robert Sweet, a National Development Council field director.
The loan fund complements an existing $4 million “Grow Erie” loan fund that was established in 2012 with $3 million in funding from the National Development Council and $1 million in funds from the Erie County IDA. That fund offers below-market rate loans that range in size between $100,000 and $2 million and repayment terms that can stretch for as long as 25 years.
“It’s more lending authority that’s available to the community,” said John Cappellino, the Erie County IDA’s executive vice president.
Sweet said interested businesses can gain more information about the loan program through the Erie County IDA, the Buffalo Urban Renewal Agency and the City of Niagara Falls. “They’ll do the initial screening,” Sweet said. “Once they do that, they’ll bring it to us for the underwriting.”