NEW YORK—The city announced a new bonding policy on Thursday designed to lower costs for small businesses and minority owned businesses that are looking to become established in New York City.
With support from the U.S. Small Business Administration (SBA), store owners will be able to access federal assistance when acquiring bonds needed to operate in the city. Entrepreneurs now have $500 million to ease the hassle of the bonds needed to set up operation.
“New York City’s small businesses are the backbone of our economy, and it’s our job to make doing business in this city as easy as possible for them—especially in today’s economic climate,” said Bloomberg in recent press release.
In New York City, bonds are required for any construction sites that exceed $500,000 but most businesses that are on the smaller side have difficulties obtaining the bonds. With high property costs and rising material costs it is tough for small business owners to open and cover the price of the city’s bonds. With these new efforts by City Hall and the support of the SBA, the environment for new companies will become more inviting in the city.
“Smaller contractors often have a tough time securing the bonds necessary to back city contracts, but we’re taking aggressive steps to change that. Our companies will now be able to benefit from the federal program that’s designed to help them secure the bonds and get the jobs. Not only will it mean hundreds of millions of dollars in new contract opportunities for New York City’s small businesses, it will also mean reduced construction costs for the city as the pool of bidders will increase significantly,” said Bloomberg.
The SBA has been granting small business assistance for other regions in the U.S. but New Yorkers did not have clearance until Bloomberg made some changes in the city’s ordinances. City officials have decided to be more flexible in light of credit sources becoming more restrictive.
“This new bonding policy removes barriers for many of our small businesses. Our goal is to encourage more participation in city contracting and create more opportunities for these businesses that are crucial to our city’s economic growth, said Department of Small Business Services Commissioner Robert W. Walsh.
A key element to the progress was the Capital Cost Containment Task Force organized last year. The group is made up of Deputy Mayor for Operations Edward Skyler and Deputy Mayor for Economic Development Robert C. Lieber.
“The revisions to the city’s performance bond will make it easier for small contractors to compete for New York City public works contracts. We expect that these changes will make a huge difference for the city's small and minority, and women-owned contractors,” said Thomas Petropole, owner of the Petropole Bonding & Insurance Agency in Brooklyn.
