BXEDC Helps Businesses in The Bronx Grow

The Bronx Economic Development Corporation (BXEDC) is a 501(c)3 non-profit that leads economic development policy in The Bronx, with a specific focus on providing capital access to small businesses. BXEDC’s core mission is to strengthen and expand current Bronx based businesses and to provide incentives to encourage businesses to establish or relocate to The Bronx.  BXEDC consults with Bronx Borough President Vanessa L. Gibson’s office on issues of economic development. Founded in March of 1981, and then made administrator of the South Bronx Empowerment Zone in 1994, BXEDC has spent over 42 years providing services and programs to The Bronx, such as:

·         Commercial loans for businesses in the South Bronx Empowerment Zone;

·         Management and technical assistance, supported by SBA lending, to Bronx Business Improvement Districts and the businesses therein to revitalize commercial corridors;

·         Successfully advocating for The Bronx by bringing in funds from the city, state, and federal governments; and

·         Creating a network of public and private Bronx stakeholders to encourage business growth and development.

Strategic Priorities, Primary Programs and Services

BXEDC’s strategic priority is capital access for Bronx businesses. The Bronx is designated as a New York State Low- to Moderate-Income (LMI) area. Though The Bronx is seeing a surge in new businesses and commercial activity, Bronx businesses lack access to affordable capital. According to the Center for an Urban Future, The Bronx saw a 66 percent increase in new business applications from 2019 to 2021. Yet when it comes to access to capital, such as from the New York City department of Small Business Services Paycheck Protection Program (PPP) COVID relief loans, The Bronx received a disproportionately small share of loans: only 2 percent of PPP COVID relief loans in NYC when to The Bronx. BXEDC seeks to fill the unmet demand for capital in The Bronx to increase business activity and revitalize commercial corridors.

Historically, through the Business Initiative Corporation of New York (BICNY), the lending arm of BXEDC, the emphasis has been on the U.S. Small Business Administration’s 504 program (SBA).  The 504 program has a statutory job creation or retention policy which is documented annually to the SBA for compliance purposes in reporting to Congress.  BICNY’s performance, as reported to the SBA, is favorable with a portfolio currently at $34MM in some 42 projects.  Per statutory reporting the 504 lending activity has created or retained 1,967 jobs to date.

BXEDC primary programs include its Empowerment Zone and SBA capital access loan programs. Through its role as manager of the South Bronx Empowerment Zone (EZ), BXEDC has access to over $20 million in funds to be used for economic development in the South Bronx, the area of The Bronx with the highest concentration of lower income census tracts.

BXEDC sponsors specific loan programs targeted in the South Bronx EZ, a New York State and City designated LMI area with numerous challenges.  The largest and most recent of these efforts was the Bronx Business Continuity Loan (BBCL) program, a local initiative during the COVID pandemic to support small businesses. Seventeen (17) loans were disbursed by BXEDC, with an average of $72,000 per loan licensed.

The success of the BBCL refocused the organization’s efforts toward the opportunity presented by the SBA’s Community Advantage (CA) loan program.  BXEDC is actively addressing the unmet demand for small balance working capital loans in The Bronx, a county where 97% of census tracts are designated as LMI. In June 2023, after an extensive review process, BICNY was awarded a license by the SBA as a participant in the CA loan program.  CA is a subset of the SBA’s flagship 7(a) lending program, however, it is specifically targeted at underserved borrowers and has an explicit statutory requirement that sixty percent (60%) of the loans be made to small businesses, as defined by SBA, in LMI designated census tracts.  BXEDC’s CA lending through BICNY is aligned with its founding mission of economic development in The Bronx’s LMI areas. CA has opened the door to significant growth in BXEDC’s lending through access to the SBA 7(a) program’s secondary market, which will allow the $10MM in capital committed by BXEDC for CA loans to be leveraged to some $50MM in lending activity. Since its inception, BXEDC’s Community Advantage program has received over 300 inquiries.

Another primary service of BXEDC is working with the twelve Bronx Business Improvement Districts (BIDs). BXEDC provides and supports Bronx BIDs through technical assistance and connecting BIDS with public and private programs. BXEDC works with Bronx BIDs to strengthen the business community in The Bronx’s commercial corridors, which are entirely LMI areas. For example, BXEDC is currently administering a $1 million storefront improvement project as part of a downtown revitalization initiative for the 161st BID.

BXEDC also works closely with colleges and universities in The Bronx. BXEDC recently awarded $1 million to Bronx Community College for programs to make technology on campus more environmentally friendly through an initiative called the Green Action Challenge. BXEDC received a $1 million from the New York Power Authority to award an institution of its choosing for an environmentally friendly initiative. BXEDC released an RFP for Bronx colleges and university for the grant. Through an extremely competitive selection process, Bronx Community College won the $1 million grant.

BXEDC’s CA loan program is the catalyst for much more to come. Capital access through loans is only one aspect of BXEDC’s economic development mission. BXEDC also engages in business education for small business owners and entrepreneurs in The Bronx. BXEDC staff actively engage clients to assist with business plan development, financial planning and projections, and loan readiness. The funds from this grant would allow BXEDC to expand its outreach operations and help more clients, all of whom will be from LMI areas in The Bronx.