At a Glance
UMEZ provides loan capital from $1 million to $10 million to projects that provide new job creation and substantial economic growth in Upper Manhattan. We are typically a subordinate loan that augments (or “gap funds”) the amount of private capital to create a stronger capital structure for the project.
Banner photo by Rosemary Santos
Our loans generally fall into two categories:
COMMERCIAL BUSINESS LOANS
These loans are aimed at small business formation and/or expansion to create local wealth and economic vitality for Upper Manhattan. These loans may be senior or subordinated financing, depending on other sources of capital for the project, and are set at below-market fixed interest rates, with flexible maturity terms based on the cash flows, job generation, and level of collateral for the project.
COMMERCIAL REAL ESTATE DEVELOPMENT LOANS
These are real estate secured loans for large commercial development projects that can serve as catalysts for job creation and transform the physical landscape of our community. UMEZ provides subordinated debt financing on flexible terms; sizing is based on the level of jobs created and overall economic return for the project. Loans may be used for construction and/or mini-permanent financing. Preference is given to projects where a senior lender has already been identified for the project.
We offer loans to qualified existing and start-up businesses in Upper Manhattan. Unlike traditional bank lenders, we generally do not focus solely on credit scores or require two years of operations. While some collateral is pledged by borrowers , we seek projects that generally meet the following criteria:
- Businesses that are located, or will expand, within Upper Manhattan
- Businesses that are sustainable and generate positive cash flow
- Businesses with experienced management teams
- Projects with meaningful equity capital investment from their owner(s)
- Projects that create a minimum of five full-time-equivalent jobs and have significant community impact
- Loan size: $1 million and above
- Pricing: Fixed rate and competitive with market rates
- Loan term: 5 to 7 years (commercial); up to 10 years (real estate)
- Uses: Start-up financing, business expansion, machinery and equipment, leasehold improvements, refinancing, commercial real estate, and working capital
- Key Requirements:
• Sustainable cash flows
• Experienced management team
• Business plan that reflects understanding of sector and project
• Meaningful equity contribution
• Personal guaranty and other collateral
• Minimum creation of five full-time-equivalent jobs
The process begins informally with a discussion with a UMEZ lending officer. After the project is deemed appropriate, an application and any pertinent project-related information that may be requested are submitted to begin the underwriting process. The underwriting process ends with final loan approval by the New York Empowerment Zone (NYEZ). The entire process typically requires two to three months to complete.
The review and approval process is summarized below:
- Application submission and due diligence
- Term sheet negotiation
- UMEZ Committee meetings
- UMEZ Board approval
- NYEZ Board approval
How to Apply
Prospective applicants are encouraged to meet with a UMEZ lending officer before applying to informally explore the appropriateness of potential funding by UMEZ. Please call (212) 410-0030 to discuss your business and funding needs.
In addition, all applicants must enroll as a vendor with New York City's Mayor's Office of Contract Services (MOCS) in order to obtain loan approval. Vendors must first create a NYC.ID and then enroll with PASSPort.
The following guides can help explain the process and how to fill out the Vendor and Principal Questionnaires online. If you have issues or need additional help with PASSPort, contact the Help Desk at MOCS.
UMEZ requires two additional forms:
UMEZ closed on a $10 million loan in 2015 to finance the redevelopment of the decommissioned Victoria Theater. The Victoria Tower will replace the legendary theater, neighboring the Apollo Theater on 125th Street. The development is expected to create significant benefits for Upper Manhattan, including the creation of approximately 575 construction jobs and 373 full-time positions. The project will have a significant impact on unemployment in the area, since many of the permanent positions are introductory jobs that will enable local residents to enter the workforce. An additional benefit of the project is the creation of 95 affordable housing residential rental units.
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