How To Get a Loan for Your Small Business in New York


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It comes as no surprise that as of 2021, there were 2.3 million small businesses in New York, accounting for 99.8% of all businesses in the state.

The intense competition means rents are high, and profits tend to be strained. In addition, the effects of the COVID-19 pandemic have stressed many of these businesses further, making it harder for them to meet their funding requirements.

A small business loan could go a long way in helping small businesses fulfill some of their needs, including:

  • Paying operating expenses
  • Expanding to new markets
  • Marketing and advertising
  • Capital expenditures

This article guides you through the process of acquiring a loan for your small business in New York by covering the following points:

  • What should you consider before starting a business in New York?
  • How much does it cost to start a business in New York?
  • What small business loans are available in New York?
  • Why do you need a small business plan before starting a business in New York?
  • What should you do next?

Things To Consider Before Starting a Business In New York

Loan application with an approved stamp.

With the third-largest economy in the United States, New York is ideal for running a business. However, getting started is as challenging as it’s exciting. Entrepreneurs must consider the following factors before setting up shop and doing business in New York:

  • Complex regulations: The state of New York has many progressive regulations designed to help employees. Business owners must keep track and adhere to these regulations, which may involve some legal costs. Working with state agencies and relevant regulatory bodies can help navigate the constantly changing regulatory landscape and ease compliance.
  • High taxes: New York has one of the highest tax rates in the country, often discouraging entrepreneurs from doing business in the city and pushing out small companies to more suburban or rural landscapes.
  • Cost of living: Like taxes, the cost of living in New York is higher than the U.S. national average. High costs mean higher expenses for small businesses as they still have to meet minimum wage requirements and pay higher costs for utilities and raw materials.

How Much Does It Cost To Start A Business in New York?

Person using a calculator.

As per the Small Business Administration (SBA), most microbusinesses cost around $3,000 to start while most home-based franchises cost $2,000 to $5,000. Add to that your estimated ongoing costs, essential and optional costs, and fixed and variable costs.

What Are the Other Costs of Starting a Business?

Most common startup expenses include:

  • Insurance, license, or permit fees
  • Rent
  • Office furniture
  • Payroll
  • Web design and web hosting
  • Basic supplies
  • Advertising and marketing
  • Taxes

The exact costs vary based on your type of business, the number of employees, and where in New York you’re based.

Bill Brigham, director of the New York Small Business Development Center in Albany, advises new business owners to project their cash flows for at least the first three months of the business’s life. You should add up fixed costs and the estimated costs of goods and best-case and worst-case revenues. This way, you can prepare your business for all possible scenarios and plan accordingly.

Although this may seem daunting, nothing worth having ever comes easy, right? New York also offers entrepreneurs a healthy supply of labor. The labor market is competitive, and workers are trying to secure the best jobs.

The state’s prestigious universities like New York University and Columbia University lead to highly skilled employees across various industries. As a result, you have a good talent pool to build your team and grow your business.

Additionally, you don’t necessarily have to start your business in the city center to benefit from its economic power. Although New York City is a major business hub, the economic activity generated there tends to spill over to neighboring areas, impacting small businesses positively. So, even opening your small business in the southern part of New York state can be advantageous.

The best part? New York has access to incredible venture capital funding. Venture-backed startups based in New York City raised more than $52 billion in 2021.

What Small Business Loans Are Available in New York?

Three people talking while looking over paperwork.

Establishing and promoting your business involves investing in marketing strategies to reach your target audience. There are various marketing tools that can help businesses expand their reach. Having access to external financing helps you pay for these expenses without having to cut down on other fixed and essential costs.

While New York has a plethora of large-scale banks and lenders that can finance your small business, local lenders might provide a more personalized experience. Establishing a solid relationship with a financial institution can also help small businesses in the long run.

What Are Some Examples of Small Business Loans In New York?

  • NYC Capital Access Loan Guaranty Program: Small businesses in New York with fewer than 100 employees can access loans and business lines of credit via this funding program. The funding obtained can be used for working capital requirements, capital purchases, and property improvements.
  • WE Fund Credit: This option is relevant for female entrepreneurs. The fund provides lines of credit to female business owners who operate in New York.
  • T.D. Bank: T.D. Bank is a preferred SBA lender, which is good news for entrepreneurs.
  • Excelsior Growth Fund (EGF): This fund is a nonprofit organization that provides loans to small businesses in New York, New Jersey, or Pennsylvania. EGF has different forms of funding that provide capital of up to $500,000 to enterprises.
  • Accompany Capital: Accompany Capital, previously known as the Business Center for New Americans, was a part of the New York Association for New Americans, created in 1949 to help resettle World War II refugees. Accompany Capital provides various funding options that include micro-loans and SBA-guaranteed small business loans.

However, loans aren’t the only option available. Business grants are a convenient alternative to raise capital for your business needs and, unlike loans, don’t have to be repaid.

New York local and state government organizations sponsor small business grants from time to time. You can check for these through the New York state library resource centerEconomic Development Administration website, or

What Should You Keep In Mind While Applying for Grants?

  • There is much competition for grants, and many businesses often apply for the same grant.
  • Grants are awarded to ventures that stand out. A business that has come up with an innovative product or has achieved something noteworthy is more likely to obtain a grant than an enterprise in an ordinary line of business, like food trucks.
  • Grants are awarded to existing businesses. If you require funds to start a venture, a loan is more appropriate than a grant.

There are numerous business grants that small businesses can apply for. Take your time to research and determine which is the most suitable per the needs and goals of your business.

The Importance of a Business Plan Before Starting a Business in New York

Most new businesses fail within a few years of inception, and one of the leading causes is a lack of effective business planning.

A business plan is essentially your business blueprint. It highlights your business objectives and how you plan to get there. A comprehensive plan should outline your market analysis, competitive analysis, customer segmentation, daily logistics and operation plans, marketing, cash flow, and overall long-term goal.

Without it, starting a business is like driving to a destination with no set route in mind.

What Are the Advantages of Making a Business Plan?

  • Help you make better decisions: Making a business plan helps you think about the best- and worst-case scenarios and how to deal with them. This allows you to be prepared for making business decisions.
  • Secure financing: In addition to checking your credit score and history, lenders also want to look at your business plan when you apply for a small business loan. A comprehensive business plan can convince them of the profitability and prospects of your business, persuading them to give you a loan.
  • Communicate with stakeholders: A well-thought-out business plan provides a realistic view of the amount of revenue an enterprise expects to earn and the period by which it expects to become profitable.
  • Employees, investors, and other stakeholders can better understand the next steps and the kinds of returns they can expect for their efforts. Sharing your business plan with stakeholders also ensures your team is on the same page.
  • Helps weather market stress and reduce risks: Determining your daily logistic and operational plans and cash flow projections can help prepare you for unfavorable market periods. Evaluating different scenarios can mitigate downside effects during recessions.

A business plan can help your small businesses survive in a competitive environment like New York. It can be the difference between a failed venture and a successful company.

You can create a business plan using spreadsheets and presentations but consider using business plan software to help you stand out. Quality software allows you to customize your approach and saves you formatting and administrative work time and effort.

AchieveIt interface.
Source: AchieveIt

What To Do Next

Several loans and grant options are available in New York for small businesses. As a business owner, it’s your responsibility to run a cost-benefit analysis to determine which type of funding best helps you achieve your business objectives at the lowest costs. Making such decisions demands thorough research and having a solid business plan can ease the process and help you secure funding.

Despite the challenges, New York is a place buzzing with opportunity. Anyone can make it big with the right vision and willpower. So, don’t let insufficient bankroll get in the way of achieving your dreams. Consider getting a small business loan or grant today.

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