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Main Street Capital Loan Fund

Last week Governor Kathy Hochul announced the launch of the Main Street Capital Loan Fund (MSCLF), a new $10 million fund that will provide qualifying start-up and early-stage companies with access to affordable term loans up to $100,000. Part of New York’s broader State Small Business Credit Initiative efforts led by Empire State Development, this program will help bridge the financing gap experienced by many entrepreneurs as they launch and grow their businesses. The MSCLF is particularly targeted to businesses in or of communities that have historically faced challenges in obtaining adequate credit or favorable terms. MSCLF loans can be used for working capital, acquiring equipment and other essential assets, and hiring talent.

The MSCLF is a partnership between Empire State Development and Pursuit, a community lender with a 70-year history serving businesses in all stages in New York State and beyond. The application will be open until November 18 and may be extended subject to availability of funds.

Business Eligibility and Eligible Uses
To qualify for an MSCLF loan, eligible businesses must:

  • Be owned by a New York State resident
  • Operate in New York State
  • Employ 100 or fewer full-time employees
  • Maintain annual revenue of under $5 million
  • Be a startup or early-stage business in operation for fewer than 4 years
  • Provide a personal guarantee from owners with more than a 20% ownership stake 

MSCLF Loans can be used for:

  • Startup costs 
  • Working capital 
  • Franchise fees 
  • Equipment and machinery
  • Inventory fees 

Loan Terms and Restrictions
MSCLF Loan Terms:  

  • Loans up to $100,000 
  • Interest fixed at 9.90% APR 
  • Maximum term of 6 years 
  • Principal deferred for the first year with interest-only payments and amortized over the remaining term of the loan in equal monthly installments

MSCLF Loan Restrictions: 
Loans cannot be used to:

  • Refinance or eliminate existing debt or equity
  • Repay delinquent income taxes unless the borrower has a payment plan in place
  • Repay taxes held in trust or escrow (e.g., payroll or sales taxes)
  • Reimburse owners for an equity investment
  • Purchase any portion of the business’s ownership interest
  • Acquire or hold passive investments in real estate

How It Works
To apply for an MSCLF loan, businesses must complete a pre-application on Pursuit’s online platform (see below). If approved, the MSCLF loan will be at a fixed interest rate and require only interest payments for the first year. After the first year, Pursuit will evaluate the borrower’s cash flow and revenue projections to determine if they may continue making interest-only payments for an additional year. Any deferred interest will be added to the loan balance, and both principal and interest will be amortized over the remaining term of the loan in equal monthly payments. 

If you are interested in the MSCLF, please reach out to Natalie Vichnevsky for a direct introduction to a Pursuit lender before completing the pre-application.  And, when you are filling out the pre-application please answer ‘Evergreen’ to question #16: How did you hear about the Main Street Capital Loan Fund? 
More information can be found on Pursuit’s MSCLF site here.

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