On December 20, 2005, Brooklyn Chamber of Commerce President Kenneth Adams testified about micro-loans before the Small Business Committee of the New York City Council.  Following is his testimony:

Good Afternoon Chairman Nelson, members of the Small Business Committee, the City Council and others here today.

My name is Kenneth Adams. I am the President of the Brooklyn Chamber of Commerce. I would first like to thank you for inviting me to testify before this committee on microloans – a product that is vital to the strength and survival of the small business community in Brooklyn and beyond.

Micro-loans are small loans, generally $35,000 and under, that come from a variety of sources including the government, foundations and other non-profit organizations. These loans require some personal guarantee from the borrower but the structure can vary quite a bit. For example, some lenders may require a cosigner but no collateral while others may require collateral, but no cosigner.  While most micro-loans are traditionally structured term loans, there are many other products available.  For instance, one of our partners, BOC Capital Corp., offers an order-based loan that allows small businesses to borrow money to complete a large order, giving them four months to collect payment on that order before the loan is due.

In short, micro-loan programs have given countless entrepreneurs the tools needed to not only jump-start new businesses but also to sustain or enhance existing businesses.

In Brooklyn, entrepreneurs have a new source for loans, lines of credit and other financial and development services. They can come to the Brooklyn Business Solutions Center, an initiative that partners the Brooklyn Chamber of Commerce with the NYC Department of Small Business Services.

The Brooklyn Chamber works closely with Business Solutions Center clients to assess their financial needs and tailor their loan request packages for the appropriate lenders.  We work with traditional, commercial lending institutions like Citibank and HSBC as well as alternative, not-for-profit lenders such as ACCION New York, Project Enterprise, and Church Avenue Merchants Block Association’s (CAMBA’s) Revolving Loan Fund.

Over the past 20 months, Business Solutions staff has helped 41 businesses throughout Brooklyn obtain over $2 million in financing. Twenty of these businesses received micro-loans that totaled about $245,000. The funding has supported a host of business needs such as expansion, relocation, purchasing, capital improvements and renovations, debt consolidation and costs associated with start-up. 

The Brooklyn Chamber has well over 1,300 Members. Our Members run the gamut from banks and large retailers to small home-based businesses and specialty shops. Our larger partners are invaluable to the Brooklyn economy but small businesses are at the heart of Brooklyn’s renaissance; they are our bars and restaurants, boutiques, flower shops and pet stores. There are 37,000 businesses in the borough and 90% of them employ 20 or fewer people. Brooklyn thrives on its small business economy.

Micro-lenders have become a valuable resource for these entrepreneurs, a number of which do not meet the criteria of traditional lenders. These loan programs provide business owners with options when they have little or no credit, or simply need help filling an order.

Stability in the small business world means successful entrepreneurs, jobs within our communities, a consistent level of service, a diverse economy and a healthy tax base. We at the Brooklyn Chamber support our traditional lending institutions but also recognize the tremendous value of micro-lenders. They have and will continue to be a valuable source for the Brooklyn small business economy and beyond.

I’d like to thank you for the opportunity to speak with you about this; I am willing to answer any questions you might have.

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