Jonnel Doris, Senior Advisor and Director of the Mayor’s Office of M/WBEs, and Gregg Bishop, Commissioner of the Department of Small Business Services, today announced the launch of a $10 million Bond Collateral Assistance Fund for M/WBEs and small businesses from Harlem to Hollis. The Fund supports M/WBEs and small businesses facing obstacles accessing surety bonds, bonds that offer collateral to ensure businesses can successfully perform on City construction contracts. The program allows eligible businesses to apply for surety bonds (collateral assistance) of up to $500,000 or 50 percent of the Contract amount, whichever is lesser, in order to meet cash collateral bond requirements. No contributions are required of contractors.
This is the third easily accessible capital fund for small businesses and M/WBEs launched by Mayor Bill de Blasio.
Additionally, the Mayor also announced that the City is ahead of its OneNYC target of awarding $16 billion to M/WBEs by 2025, having awarded $5 billion to M/WBEs since the goal was announced in 2015.
“Not only are we expanding the number of easily accessible capital programs to help minority and women-owned businesses, but we are also seeing record investments going towards these businesses,” said Mayor Bill de Blasio. “We are, in turn, removing historical barriers to capital and creating new pathways to economic opportunity, while investing in local communities for a more prosperous New York City.”
For the best picks, get HWM's must read newsletter!
“Our administration understands that minority and women-owned businesses in New York City are valuable – but too often underutilized – assets,” said First Lady Chirlane McCray. “That’s why we’re making such a concerted effort to bring these businesses into the economic stream of our city. Events like this are designed to provide entrepreneurs, who are underrepresented in their fields, with more opportunities for success. Because when their businesses succeed, so do their families, communities and our city.”
“This City’s economy flourishes when all of New York’s businesses have the support and access they need to succeed,” said Deputy Mayor for Strategic Policy Initiatives and Citywide M/WBE Director Richard Buery. “Investing in small and minority and women-owned businesses is at the core of our strategy to increase economic opportunity and to reinvest in communities so that the City as a whole can reap the benefits. Through initiatives, such as our new Bond Collateral Assistance Fund, we continue to make it possible for our M/WBEs to thrive. That’s why we’re well on our way to award $16 billion to minority and women-owned businesses by 2025. We are truly creating a City that works for everyone.”
These announcements were made at the 11th Annual Procurement Fair at the Bank of New York Mellon, to connect New York City minority and women-owned businesses to public and private contracting opportunities and other resources. The event was hosted by the Department of Small Business Services. More than 1,500 Minority and Women-owned Business Enterprises (M/WBEs) and 80 City and State agencies and public authorities are expected to attend the networking event to discuss upcoming contracting opportunities. The fair is part of Mayor de Blasio’s historic commitment to supporting M/WBEs, including goals to double the number of certified and re-certified M/WBEs to 9,000 by 2019, award at least 30 percent of City contract dollars to M/WBEs by 2021, and award $16 billion in City contracts to M/WBEs by 2025.
“To all small and minority and women-owned business: these programs and initiatives were created and tailored for you. Please, use them,” said Jonnel Doris, Senior Advisor and Director of the Mayor’s Office of M/WBEs. “This Administration is committed to making capital available to entrepreneurs that will enable them to grow and sustain their business as well as reinvest in their local communities as they help build New York City. With this loan program, we’re leveling the competitive playing field so that all New Yorkers, regardless of race, gender or ethnicity, have a fair shot at economic opportunity.”
“City contractors should reflect the rich talents and diversity of all New Yorkers, and the procurement fair connects M/WBE business owners with City agencies looking to hire contractors,” said Gregg Bishop, Commissioner of the NYC Department of Small Business Services. “We are also proud to announce the creation of a new $10 million fund to help small construction firms obtain the surety bonds they need to perform on City contracts. This fund will help open the door for small contractors, including M/WBEs, so that they can better compete and contribute their talents to our city.”
“We are open for business,” said Department of Citywide Services Commissioner Lisette Camilo. “The City’s Procurement Fair allows M/WBEs the ability to better learn our business so that we can do business with them. In addition, the bond collateral assistance fund is another way we are making sure that procurement opportunities are accessible to all our M/WBE contractors.”
The fund supports M/WBEs and small businesses facing obstacles accessing surety bonds, including bid, payment, performance, or ancillary bonding, to perform on City construction contracts as prime or subcontractors. The program allows eligible businesses to apply for guaranty funds of up to $500,000 or 50 percent of the contract amount, whichever is lesser, in order to meet cash collateral surety bond requirements.
Surety bonds serve as collateral when small businesses are completing construction work for the City. Small businesses and M/WBEs face challenges when securing surety bonding despite their ability to successfully perform on City contracts. This is often due to traditional underwriting requirements including: credit score, collateral, financial position, business experience. The Bond Collateral Assistance Fund will remove that burden for qualified businesses that can successfully perform on City construction work by enhancing their application through access to guaranty funds.
In order to be eligible, businesses must be operating construction businesses that are bidding or planning to bid as a prime or subcontractor on a contract with a City agency or NYCEDC that requires bonding. Interested firms may fill out a Bond Collateral Assistance Fund inquiry form at nyc.gov/bondfund.
The Bond Collateral Assistance Fund is the third capital loan program launched under Mayor Bill de Blasio.
In March, the de Blasio Administration launched the Contract Financing Loan Fund to help M/WBEs secure affordable access to capital to help perform on City contracts. Businesses may apply for loans of up to $500,000. The loans feature flexible repayment schedules that are timed to align with City contract payment schedules, helping businesses improve their cash flow. These loans may be used to help small businesses purchase equipment and hire employees.
The City has deployed $1.125 million since its launch on March 23, 2017.
The Mayor also launched a $10 million of capital to pilot the Emerging Developer Loan Fund at the Economic Development Corporation. The fund provides low-interest loans to New York City-based real estate projects including mixed-income housing, mixed-use, industrial and commercial projects, and projects with development costs under $30 million.
“Small businesses are like acorns—they grow,” said Manhattan Borough President Gale A. Brewer. “It’s important to help support them—and especially important to help those owned by minorities and women. Enabling MWBE’s to bid on contracts for work the government already needs is an organic way to do that, so I applaud the Mayor’s office of Small Business Services for mounting their procurement fair again this year.”
“I think this is a great step forward and the next logical move in making MWBEs part of the economic development landscape, but we can’t stop here. I applaud the Mayor for meeting with the banks to ensure that these businesses have access to capital. As the ranking Democrat on the Senate Banking Committee and the Chairman of the Senate Task Force on MWBEs, I will do everything in my power to help the mayor in this endeavor and ensure that MWBEs have an even playing field.” said State Senator James Sanders Jr.
“I continue to applaud Mayor Bill de Blasio and his administration for the on-going effort to support W/MBEs, by helping to give them financial stability, as well as a healthy share of the city’s business. It is so important, especially in such a cosmopolitan city as ours, that women and minority enterprises receive the support they need and deserve.” said Assemblyman Luis Sepulveda.
“As chair of the Contracts Committee, supporting our M/WBE and small city contractors is one of the most important parts of my job. This administration has shown a real commitment to creating innovative and effective new tools for us to do exactly that. I want to congratulate NYC Small Business Services on hosting its 11th Annual Procurement Fair, and on the launch of the highly promising Bond Collateral Assistance Fund. Thank you to the Mayor, the Deputy Mayor, and Commissioner Bishop for their ongoing leadership and partnership on this issue and best wishes to everyone participating in the Fair,” said Council Member Helen Rosenthal.
“Working to build capacity among our minority- and women-owned businesses is essential if we are to ensure that the fruits of this City’s economy are enjoyed by all. The City’s Annual Procurement Fair and new $10 million Bond Collateral Loan Fund are aimed at just that – investing in M/WBEs to help them perform on lucrative contracts with the City. I commend Mayor Bill de Blasio, Commissioner Bishop, and Director Doris for their strong investment in growing the City’s commitment to M/WBEs and will continue to be a vocal advocate for minority- and women-owned firms throughout New York City.” said Council Member Robert Cornegy.
The Procurement Fair offered networking for attendees and information about available contracting opportunities. Attendees learned about the City’s procurement process, subcontracting practices of prime contractors, and available programs and services to help M/WBEs better compete for City contracts.
First Lady Chirlane McCray was also in attendance of the 11th Annual Citywide Procurement Fair where she addressed a crowd of 200 minority and women-owned business representatives. She stressed the importance of diversifying the City’s pool of entrepreneurs, tapping into their talent and supporting their growth. She highlighted that this new commitment builds on the administration’s efforts to break down barriers that women and minorities face in contracting.
Separately, the de Blasio Administration, along with State Senator Marisol Alcantara and Assembly Member Alicia Hyndman, are leading an urgent push to pass State legislation that would benefit City-certified M/WBEs. The State bills, S6513 and A08508, would grant New York City the flexibility to utilize the same economic development tools which the State itself uses to help M/WBEs and small businesses enter the market for public procurement. These policy instruments include allowing the City to raise the discretionary threshold to $150,000 to closely match the State’s $200,000 threshold and to use best value in awarding points for M/WBEs. Currently, the City is authorized to award contracts of up to $35,000 for construction work and $20,000 for goods and services without having to go through a competitive bidding process, a process that can at times be burdensome for M/WBEs. This legislation would increase discretionary spending to $150,000 for goods and services purchased from City-certified M/WBEs. The legislation would also allow the City to use a firm’s status as an M/WBE as criterion when awarding a contract.
On Tuesday, June 20th, the State Senate passed S6513 unanimously 63-0.
For more information on all SBS services, go to nyc.gov/sbs, call 311, and follow us on Facebook, Twitter, and Instagram.