A new $10 million loan program for Bronx businesses, funded with money left over from the long-forgotten Bronx empowerment zone, will be announced Thursday morning by U.S. Rep. Ritchie Torres (D-The Bronx) and Bronx Borough President Vanessa Gibson.
The loans, to be handed out by the Bronx Economic Development Corporation, will range from $5,000 to $350,000 and can be used for a variety of purposes including payroll, inventory and equipment. Eligible businesses will be primarily in the South Bronx, which was the heart of the federal empowerment zone.
Empowerment zones were created in the 1990s under President Bill Clinton, providing tax breaks and other incentives for growth in economically depressed areas. They were mostly abandoned when they failed to spark development.
But BxEDC President Robert Walsh discovered $20 million in unspent empowerment zone funds after taking over the organization officially in June, having served as interim leader since the fall. The former commissioner of small business services in the Bloomberg administration won federal approval to use half the money for the new loan program.
He recruited the Business Initiative Corporation of New York, a specialist in arranging Small Business Administration loans, to spearhead the effort and market the opportunity to eligible businesses.
“The banks have tightened credit and in general don’t like to give loans for small amounts like $10,000,” Walsh said in an interview with THE CITY. “We are going to start getting the word out.”
One way they plan to do that is to contact businesses that received Paycheck Protection Program loans under the COVID pandemic bailout programs to see if they need more help. However, Bronx businesses received only 7% of all PPP loans given to New York City businesses.