What's happening
This bill allows minority and women-owned businesses to use state development funds to refinance existing debt if current loan terms are deemed unreasonable.
Why it matters
Targets predatory or unfavorable lending practices. By enabling debt refinancing only when existing loan terms are deemed "unreasonable" (e.g., high interest rates, balloon payments, over-collateralization), the bill aims to protect minority and women-owned businesses from exploitative or destabilizing financial arrangements.
Requires oversight and justification. State support for refinancing is contingent upon a formal review and written justification process, which adds a layer of accountability and ensures that only genuinely problematic debt is eligible for relief.
Potential to improve business stability and growth. By allowing access to better loan terms, eligible businesses may reduce financial strain, improve cash flow, and redirect resources toward growth and job creation, thus supporting broader economic development goals.
Specifically tailored to systemic barriers. The bill recognizes that minority and women-owned businesses often face less favorable lending conditions, and addresses this through targeted intervention, which could help close equity gaps in entrepreneurship and business ownership.
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Who cares
Headline styles
Let Businesses Refinance Old Debt
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to economic development
- Delivered to assembly
- Passed senateVote 62–0
- Advanced to third reading
- 2nd report cal.
- 1st report cal.429
- Referred to corporations, authorities and commissions
- Returned to senate
- Died in assembly
- Referred to economic development
- Delivered to assembly
- Passed senateVote 61–1
Show 5 earlier actions
- Ordered to third reading cal.1417
- Committee discharged and committed to rules
- Print number 2296a
- Amend and recommit to corporations, authorities and commissions
- Referred to corporations, authorities and commissions
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Allow Debt Refinancing for MWBEs
In Assembly Committee · Economic Development · Sponsor Rodneyse Bichotte Hermelyn
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
2296--A
2019-2020 Regular Sessions
IN SENATE
January 23, 2019
Introduced by Sen. SANDERS -- read twice and ordered printed, and when printed to be committed to the Committee on Corporations, Authorities and Commissions -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the urban development corporation act, in relation to allowing businesses to use funds received from the minority and women-owned business development and lending program for the purpose of refinancing existing debt
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subparagraph (vii) of paragraph (c) of subdivision 1 of section 16-c of section 1 of chapter 174 of the laws of 1968, constituting the urban development corporation act, as amended by section 1 of part AA of chapter 55 of the laws of 2014, is amended to read as follows:
(vii) refinancing of debt or equity invested in an enterprise or project, unless the chairperson of the corporation finds the terms of the original debt to be unreasonable as provided in subparagraph (ix) of paragraph (d) of this subdivision.
§ 2. Subparagraphs (vii) and (viii) of paragraph (d) of subdivision 1 of section 16-c of section 1 of chapter 174 of the laws of 1968, constituting the urban development corporation act, subparagraph (vii) as amended and subparagraph (viii) as added by section 1 of part AA of chapter 55 of the laws of 2014, are amended and a new subparagraph (ix) is added to read as follows:
(vii) establish a comprehensive technical assistance program in cooperation with the department of economic development to assist minorityand women-owned businesses and potential minority and women-entrepreneurs; [and]
(viii) notwithstanding any provision of law to the contrary, establish a minority- and women-owned business investment fund to provide critical
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00792-02-9
S. 2296--A 2
financial support to foster the development of new and emerging ideas and products of minority- and women-owned business enterprises as well as to promote the long-term financial performance and success of early stage enterprises that are minority- and women-owned start-ups. The selection of an eligible applicant and beneficiary companies for the minority- and women-owned business investment fund shall be selected by the process established pursuant to subdivisions two through four of section sixteen-u of this act. Minority- or women-owned business enterprises who participate in such minority- and women-owned business investment fund under this subdivision shall not be precluded from qualifying for any other assistance, grant or loan made available from the state[.]; and
(ix) provide for the refinancing of debt or equity invested in an enterprise or project, provided that the chairperson of the corporation determines the terms of the original debt to be unreasonable. The applicant must submit a written justification to the chairperson of the corporation for each loan explaining why the current loan is not on reasonable terms. Unreasonable terms of debt may include but are not limited to:
(1) a demand or balloon maturity feature in the existing note;
(2) the current maturity is not appropriate for the original purpose of the loan;
(3) the existing debt being refinanced is on a revolving line or a credit card;
(4) the interest rate is deemed unreasonable by the corporation; or
(5) the loan is over-collateralized.
§ 3. This act shall take effect on the ninetieth day after it shall have become a law. Effective immediately, the addition, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date are authorized and directed to be made and completed on or before such effective date.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the urban development corporation act, in relation to allowing businesses to use funds received from the minority and women- owned business development and lending program for the purpose of refi- nancing existing debt
Purpose
Allows businesses to use funds received from Minority and Women-Owned Business Development and Lending Program of the Empire State Development Corporation for the purpose of refinancing existing debt.
Summary of provisions
Section 1. Subparagraphs (vi) and (vii) of paragraph (c) of subdivision 1 of section 16-c of section 1 of Chapter 174 of the Laws of 1968, constituting the urban development corporation act, as added by chapter 169 of the law of 1994, are amended. A debt may be refinanced if the chairperson of the Empire State Development Corporation finds the original debt to be unreasonable.
Existing law
The state Minority and Women Owned Business Enterprises goals do not currently apply to municipalities.
Justification
Currently, the Minority and Women-Owned Business Development and Lending Program does not allow small business to do debt refinancing. Modifying this existing loan program would permit a small business to refinance existing debt on more favorable terms, which would allow these busi- nesses to improve their cash flow. Too often, commercial credit cards are the first and only means for small businesses to access credit. And while credit cards provide relatively easy and convenient credit, inter- est rates are substantially higher (often topping @20%) than loans available through banks, credit unions, or CDFIs. For example, a small business with $20,000 in credit card debt could expect to pay $4,000 or more a year in interest on credit card debt. However, if the business could refinance that debt under one of the State's existing micro-loan programs, the interest payments could fall to as little as $1,200 to $1,600, saving the business nearly $3,000 a year.
Legislative history
2011-12: A.8037 Referred to assembly economic development
2013-14: A.4350 Referred to assembly economic development
2015-16: 5.5737 REFERRED TO SENATE CORPORATIONS, AUTHORITIES AND COMMIS- SIONS
2015-17: A.7719 Referred to assembly economic development
2017-18: S.3218 REFERRED TO SENATE CORPORATIONS, AUTHORITIES AND COMMIS- SIONS
2017-18: A.491 Referred to assembly economic development
2019:S.2296-A passed Senate
Fiscal implications
None
Local fiscal implications
None
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.