As New York’s COVID 19 numbers continue to decrease, many of our current clients are ready to finally re-open or to expand their businesses while our many new clients are excited about getting their startups going.
Because that requires working capital, one of the questions clients often ask about Accompany Capital financing is how we work with the Small Business Administration.
Our partnership with the SBA is a longstanding and successful one and we are particularly recognizant of the SBA’s significant contribution in providing a lifeline to small businesses as the pandemic threatened to cause so many businesses to fail.
We were first certified as an SBA Microlender in 1999 which allowed us to access the low-cost capital the SBA provides for microloans and, in turn, extend that financing to our clients. Then, as our clients’ businesses grew and their capital needs increased, we took the next step, becoming certified in 2018 as an SBA Community Advantage Lender. That has allowed us to borrow from the SBA – and in turn extend to clients – loans of up to $250,000.
To date, we have provided clients with close to 3500 SBA-backed micro and small business loans, ranging from $500 to $250,000, and totaling over $20,900,000, as well as supporting nine small businesses with SBA-backed Community Advantage loans for a total of $2,005,000.
Throughout the now-two-year-long health and economic crisis created by the COVID-19 pandemic, the SBA has also been helping its partners support micro and small business clients in multiple, targeted ways, starting with the CARES Act in 2020.
As soon as the CARES Act passed, Accompany Capital’s loan team quickly mobilized to collect the required documentation and process applications for forgivable SBA-backed Payroll Protection Program loans. As a result, Accompany Capital was able to process over 350 forgivable PPP loans, totaling over $6.6M, as COVID devastated New York businesses and communities.
One client who benefited not only from SBA-backed financing but also COVID relief is Abdoulaye Bagayogo. Originally from Ivory Coast, he had been working as a yellow cab driver since 1990 and, in 2006, took out a large traditional loan to purchase a taxi medallion. With an SBA-backed Community Advantage loan from Accompany Capital he was able to refinance and reduce his crippling debt by over $400,000. Then, when his income dropped dramatically during the pandemic, the Accompany Capital team was able to process a PPP loan of $20,833 that was then fully forgiven by the SBA. As a result of our financial support and guidance, he was able to maintain financial stability throughout the worst of the pandemic.
One aspect of SBA’s supportive role in COVID relief that deserves more attention is the debt relief they provided for individual loans that had been made with SBA-backed funds. By waiving a portion of our clients’ debt obligation to us – totaling over $2,000,000 for approximately 500 of our struggling microloan clients and 6 small business clients – the SBA also waived our obligation to repay the SBA.
Not being obliged to cover that portion of our clients’ debt when they were unable to repay us protected our own loan fund, allowing us to continue to make more loans like the one we recently made to Andrea Lord, owner of Andrea Lord Studio, a men’s hair studio located in Soho. Accompany Capital not only helped her get started with an SBA Loan, but provided help with planning, strategy, and cash flow that helped turn her dream into reality. As she gets ready for opening day, Andrea continues to benefit from ongoing technical assistance from Accompany Capital and appreciates the ongoing support. “Accompany Capital is helping with all aspects of business management and strategy, including human resources, bookkeeping systems, cash flow management, and strategic planning,” she explains. “It’s as if I have my own Board of Directors.”
Still another client who benefited from both SBA PPP loans and the SBA CARES Act payments is Aguiratou Mohammed, a refugee from Burkina Faso who had already built a thriving Day Care in the Bronx with 2 SBA funded microloans for $10,000 and $45,000 from Accompany Capital’s Loan Fund. She had just opened a new grocery business when the pandemic threatened both businesses – and her ability to provide for her 5 children. Fortunately, she received both a PPP loan and SBA CARES Act debt relief payments that allowed her to weather the pandemic successfully.
SBA’s Restaurant Revitalizing Fund has also provided a much-needed lifeline to a sector that was one of the hardest hit. Several of our clients, including Delhi Heights in hard-hit Jackson Heights, Queens, not only received SBA-backed Community Advantage loans and PPP loans, but also RRF loans that have enabled them to reopen and continue to keep their staffs employed.
Because we are invested in our clients’ success, we are grateful for our long-standing relationship with SBA. The SBA provides unique and critical opportunities for Accompany Capital and our fellow CDFIs to continue to provide low-cost capital to hardworking men and women, immigrants, refugees and native New Yorkers alike, whose small businesses are the backbone of New York’s economy and neighborhood culture.