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Business Development Advance

Business Development Advance Overview

The Federal Home Loan Bank of New York (FHLBNY) is pleased to announce the launch of the Business Development Advance (BDA) on Thursday, November 4, 2021. The BDA is a 0% advance to help our members provide funding to qualifying small businesses to promote community & economic growth.

The BDA is subsidized funding in the form of interest-rate credits. There is a total of $3 million of interest-rate credits available in 2021. Members can request to reserve their interest-rate credits up to $50,000 on a first-come / first-served basis. The BDA is intended to help fund loans originated to local businesses that are qualified as a small business, as defined by the Small Business Act (15 U.S.C 632 (a)). The submission of qualifying loans as well as the BDA funding must be executed prior to year-end 2021.

Program Guidelines:

Advance Attributes

Structure

Program Cap1

$3 million in subsidized funding in the form of interest-rate credits has been allocated to the Program

Member Cap2

Up to $50,000 in subsidized interest-rate credits will be given per member

Minimum Term

1-year minimum term

Maximum Term

5-year maximum term

Eligible Advance Types

Fixed-rate Advances

1Once the Program funding is exhausted, additional subsidized funding could potentially be added to the Program.

2Individual member’s interest-rate credit cap is $50,000 and calculated using the interest rate of the Advance at the time of booking. The interest rate subsidy will be credited back to members’ accounts monthly, over the life of the Advance.

Reservations under the Program will be approved on a first-come / first-served basis so long as funds are still available within the Program and Member caps.

Advances will be transacted in the same manner as traditional Advances, in adherence with all credit, collateral, and capital stock requirements.

Loan Submission Guidelines:

Loan Attributes

Structure

Qualifications

Qualified as a small business, as defined by the Small Business Act (15 U.S.C 632 (a)), and verified using either the North American Industry Classification System (NAICS) Codes or a copy of the SBA note

Rate Markup

Members may charge a reasonable markup over the zero-percent Advance, but cannot exceed 300 bps over the Advance

Qualified Loans

Qualified loans must be submitted and the BDA must be executed prior to year-end 2021

Loan Submissions3

Loans can be submitted individually or pooled together for qualification under the Program

Certification

Member must certify loans meet qualification and rate mark-up criteria

3The Advance amount must be equal to or less than the loan(s) originated. Advance requests in excess of the maximum per member interest-rate credit cap of $50,000 may be eligible for other discounted funding under the Community Lending Program.

Benefits to Members:

  • Supports communities by helping local businesses with their funding needs at competitive interest rates
  • Provides members with a competitive advantage when bidding for small business loans
  • Affords opportunities for members to elevate their image when marketing to new customers and creates value for existing customers
  • Ensures a reasonable spread for members’ small business lending activities

Mechanics of the BDA:

Mechanics of the BDA_9.15

Key Contacts

Relationship Managers:
(212) 441-6700
MSD Team
(212) 441-6600
[email protected]

BDA Overview

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CLP System

Members must enroll in our CLP system to access BDA and our Community Lending Programs.

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