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Business Initiative Corporation outlines SBA 504 and Bronx-focused loans to help small businesses
Summary
On BronxNet's Meetings of the Minds, Rafael, president of the Business Initiative Corporation of New York, explained how SBA 504 financing and a Bronx-only Community Advantage loan help businesses buy property, control rent exposure and access working capital; he cited typical loan sizes, eligibility and how to apply.
Rafael, president of the Business Initiative Corporation of New York, told BronxNet’s Meetings of the Minds that the nonprofit’s primary product is the SBA 504 loan, which helps small businesses purchase the real estate where they operate and lock long-term financing.
"Our bread and butter is the SBA 504 loan," Rafael said, explaining the program is owner-occupied and can let a business limit rent increases by owning its premises. He said the SBA portion often requires about 10% down for qualifying borrowers and has interest rates on the SBA portion locked for 20 to 25 years.
Rafael contrasted SBA-backed lending with conventional bank loans, saying traditional lenders typically expect stronger loan-to-value metrics and cash flows. "The SBA takes away some of those warts by absorbing some of the risk the bank would take," he said, allowing smaller operations to purchase buildings they might otherwise be unable to afford.
In addition to 504 lending, Rafael described a Community Advantage loan program BIC operates in the Bronx for working capital, refinancing small debt or buying inventory. He said national Community Advantage loans can be as large as $350,000 but that BIC typically makes smaller loans in the Bronx—"less than $200,000"—to direct more capital into underserved neighborhoods and provide hands-on assistance.
Rafael also outlined BIC’s non-lending services: walk-throughs to reduce the chance of city fines, participation in borough bidding processes to help local businesses access contracts, and partnerships with organizations such as the Lehman Small Business Development Center and the Bronx Economic Development Corporation to deliver technical assistance.
On eligibility, Rafael said applicants should show a business track record (a few years of operation or relevant industry experience, or experienced partners), be ready to provide tax records and cashflow documents, and be able to explain the intended use of funds in an intake form.
To apply, Rafael directed listeners to BIC’s online intake at bicofny.org and pickofnewyork.org, where prospective borrowers complete a form that helps staff assess needs and readiness. "If you can take us on the journey yourself, it shows us you are ready to actually use the money," he said.
As an example of the programs in practice, Rafael recounted a 2007 Hunts Point fruit company that used a 504 loan to buy and rework its building, modernize operations and expand distribution—allowing the family business to grow and involve a younger generation.
For more information, Rafael and the host directed viewers to bicofny.org and BIC’s social channels.
