Financial news: carving a new path

Black Enterprise, Oct, 1998 by Carolyn M. Brown

Carver Bancrop teams with McCall, NYBDC to increase minority loans by $200 million

Often the biggest obstacle for African American businesses to hurdle is access to start-up and expansion capkal. In order to increase lending opportunities in the Big Apple, New York based Carver Bancorp Inc. aligned with the New York Business Development Corp. (NYBDC) and the New York State Common Retirement Fund to significantly increase its loans to minority- and women-owned businesses.

The New York State Common Retirement Fund, headed by State Comptroller H. Carl McCall, has committed $200 million to NYBDC to fund small business loans and expand outreach efforts to women-and minority-owned businesses. This new partnership with NYBDC, a privately owned and managed corporation in partnership with 157 commercial and savings banks, will allow loans originating from Carver to be partially underwritten by the consortium, thus limiting Carver's risk factor while increasing its lending volume.

The move marks a continued commitment pledged by Carver CEO Thomas L. Clark Jr. to increase its loans to minority businesses.

Of particular note is that this is the first time in its 40-year history that the NYBDC has participated directly with a member bank to grant loans. "If the program proves successful," NYBDC President and CEO Robert W. Lazar says, "it could set the precedent for working with smaller independent banks, like Carver, which have limited capital and resources."

Carver will market the lending program and receive the inquiries for small business loans ranging from $25,000 and $1 million for working capital, debt refinance, equipment and real estate property. NYBDC's staff will assist Carver in underwriting, structuring, evaluating and processing the loans. Carver will have 50% participation in these loans, and once a loan is disbursed, Carver will provide all of the banking services.

To quality, start-up businesses must be able to deliver a solid business plan and adequate projections, and have access to collateral. Start-up business owners will be encouraged to take advantage of pro bono technical assistance from statewide Small Business Development Centers.

"This initiative gives Carver access to additional capital and an expert underwriting source to provide small business loans in underserved communities," says McCall. "Carver and NYBDC understand that the future of New York State begins with the grocer in Harlem and the restaurant in Brooklyn."

For more information about Carver's Small Business Lending Program, call 212-876-4747.