The Econ-versation: New York City program to help female entrepreneurs access lines of credit
November 20, 2019
New York City’s Department of Small Business Services (SBS) recently started the WE Fund Credit program to provide lines of credit to female entrepreneurs. In general, women entrepreneurs have more difficulty attaining loans than males, and they therefore tend to ask for smaller loans. The WE Fund Credit program aims to grant female owners of small businesses easier access to credit.
The program is part of the SBS initiative WE NYC (Women Entrepreneurs NYC), which is committed to helping women launch and develop businesses. To create the program, SBS’s WE NYC partnered with the New York City Economic Development Corporation, Goldman Sachs 10,000 Small Businesses, Squarespace, and Fundation, according to a New York City Government press release.
WE Fund Credit aims to offer about $5 million in lines of credit with individual recipients obtaining up to $100,000 at annual percentage rates (APR) of about 12 percent. To apply, women must have been in business for at least one year, have credit scores of 620 or higher, and earn a minimum of $50,000 in annual revenue.
To finance the program, Goldman Sachs 10,000 Small Businesses — a program that provides entrepreneurs with support in the areas of capital and education — is contributing a $300,000 grant for technical aspects and outreach in addition to contributing to the $5 million allocated towards lines of credit. Fundation — a credit providing company for small and medium-sized businesses — is also providing $500,000 for lines of credit.
Along with the program, there is a $1 million loan loss reserve funded by the New York City Economic Development Corporation, Goldman Sachs 10,000 Small Businesses, and Squarespace — a private company providing customers with the tools necessary to build their own websites — to cover any losses on loans if they are not paid back.
From a test launch about a month ago, WE Fund Credit already received 13 applications. With the program now in full swing, all eligible women are able to apply.
This information was first reported in The Wall Street Journal.
