Frequently Asked Questions

Yes, a business must have operations in New York in order to be eligible. The New York Forward Loan Fund 2 is the only small business loan program of its kind that is accessible from anywhere in the state through a virtual platform.

Yes. A business can apply for a loan through New York Forward Loan Fund 2 even if they have received a loan through the program in the past.

New York Forward offers loans of up to $150,000. Repayment periods are between 36 and 72 months depending on the loan structure, and borrowers may prepay their loans at any time without penalty or fees.

Interest rates are fixed for the life of the loan. The interest rate for New York Forward loans is based on the WSJ Prime rate (either at the time of application or loan closing, whichever is lower), plus an additional 1% for 36-month terms, 2% for 48-month terms, 3% for 60-month terms and 4% for 72-month terms. As of November 7, 2024, the WSJ Prime rate is 7.75%.

Applicants will be able to “lock” in their rate at the time of application, and if the rate decreases between when they apply and when the loan closes, applicants will receive the benefit of the rate decrease. For example, if when the applicant applied for a 36-month loan, the WSJ Prime rate was 8.0% but the prime rate increased to 8.50% before the loan was closed, the loan rate would remain at 9.0% (the lower of the two rates + 1.0%). If when the applicant applied for a 36-month loan, the WSJ Prime rate was 8.0% but decreased to 7.5% before the loan was closed, the loan rate would decrease to 8.5%.

No. Borrowers may prepay the loan at any time without penalty or fees.

No. The New York Forward Loan Fund 2 does not provide grants or offer forgivable loans.

If you meet the initial eligibility requirements, you will be matched with one or more nonprofit community lenders after completing the pre-application and will need to click “connect” next to the lender you would like to work with. Lenders will then request additional documentation to determine if your business is ready for a loan. If so, they will determine the loan terms that are best suited to your business.

When you connect with a lender at the end of the pre-application, you will receive a confirmation email from Connect2Capital and then another email directly from the organization you selected to work with.

If you do not match with a community lender, you will have the opportunity to reach out to one of the Entrepreneurship Assistance Centers (EAC) from the EAC Directory that appears under the “Additional Resources” list that shows up on the results page after you complete the pre-application. These centers provide free services and can work with you to answer questions, identify reasons why you may not have matched with a lender, and provide business guidance to move you closer to being loan-ready in the future.

The lenders in this program are Accion Opportunity Fund, Ascendus, Grow America’s Community Impact Loan Fund, Pursuit, and TruFund.

Each of our nonprofit lenders has decades of experience working directly with small businesses across the state. Borrowers are matched with lenders after submitting a full application with the required documentation. If an applicant matches with more than one lender, the applicant will choose which lender they would like to work with. Once matched, the lender begins a standard intake application and underwriting process.

The loan proceeds must be used solely for a specified business purpose, which may include:

• Start-up costs
• Working capital
• Franchise fees
• Acquisition of equipment, inventory, or services used in production, manufacturing or delivery
• The purchase, construction, renovation or improvements of an eligible place of business that is not for passive real estate investment purposes

Loans can also be used for:

• Payroll
• Utilities and rent
• Supplies
• Marketing and advertising
• Other expenses

No specific collateral is required for a New York Forward loan, as the primary source for repayment is the cash flow generated by the borrower’s business. However, the lender will take a lien against a borrower’s business assets, as well as additional collateral if the lender believes it is commercially reasonable to do so. The personal guarantee of each owner of 20% or more of the small business applicant is required at the close of each loan. No personal guarantees will be required for nonprofits. 

No. Please note that being matched with a prospective lender does not constitute an offer or a commitment to lend. Depending on the number of applications, it is possible that not all applicants will receive a loan. Applications will be reviewed on a rolling basis. In addition, all loans are subject to underwriting review and approval by participating community lenders, who are responsible for their own credit decisions.

As part of your full loan application, you will need to provide the following documentation to the community lender:

• Most recently filed tax returns, if available and required by the lender; if not available, internally generated financial statements or other documentation used to determine cash flows
• Schedule of ownership (name, address, Social Security Number or Tax Identification Number, phone number, email, percentage ownership for any owners with more than 20% ownership) 
• Personal guarantee from each owner of at least 20% of the small business borrower
• Executed Borrower Attestation Form and SEDI-Owned Business Certification (to be provided by lender)
• Evidence of legal formation of business entity (Articles of Incorporations and/or Bylaws)
• Personal credit report (if applicable)
• Other documentation required by the community lender at or after the time of application

A participating community lender will reach out to you to collect the required documentation, conduct any credit checks, and finalize the application review process.

Our community lenders are available to assist you with every step of the application and can connect you with additional support services through one of the Entrepreneurship Assistance Centers (EAC), if needed.

New York’s network of Entrepreneurship Assistance Centers (EAC) are available to provide free support before, during, and after the loan application process. Entrepreneurship Assistance Centers provide instruction, training, technical assistance and support services to small business owners and entrepreneurs in local communities statewide. To find an EAC in your area, view the EAC Directory.

• Passive real estate investments or the purchase of securities
• Firms engaged in lobbying activities or pyramid sales schemes
• Facilities primarily used for gambling or to facilitate gambling
• Businesses engaged in activities prohibited by federal law or applicable law in the jurisdiction where the business is located or conducted
• Businesses engaged in speculative activities that develop profits from fluctuations in price rather than through the normal course of trade, such as commodity futures trading or passive real estate investing
• Businesses that earn more than half of their annual net revenue from lending activities, except for Community Development Financial Institutions and Tribal enterprises that are not depository institutions or bank holding companies
• Businesses seeking to repay delinquent federal or state income taxes, unless the small business borrower has a payment plan in place with the relevant taxing authority

If you do not make a loan payment on time, you will be assessed a late fee. A failure to pay may result in the loan being declared in default. During the loan application process, your community lender will discuss the full terms of your loan agreement to ensure you understand the details regarding late payment and default.

Applicants should only submit one pre-application. Borrowers will not be prohibited from receiving multiple loans from the New York Forward Loan Fund 2, but it is up to the originating lenders to approve additional loans. A borrower must have only one application for a loan open at any given time. Each loan must have a separate, defined use of proceeds, and such loans shall be subject to any applicable maximum or minimum sizes or other terms and conditions.