Brooklyn's Progress
December 2006/January 2007

The Brooklyn Chamber of Commerce was called upon to testify before the New York City Council Small Business Committee about obstacles facing those seeking to start their own business. The following is the testimony presented by Brooklyn Business Solutions Center Financial Services Director Daniel Fisher at the hearing which was held on Dec. 19:

Good Afternoon Chairman Yassky, Members of the Small Business Committee. My name is Daniel Fisher. I am the Director of Financial Services at the Brooklyn Business Solutions Center, an initiative that partners the Brooklyn Chamber of Commerce with the New York City Department of Small Business Services. Thank you for the opportunity to talk about obstacles facing future entrepreneurs.

Entrepreneurs with businesses at all stages of development come to us for varying levels of assistance: from the established with worries about healthcare and workforce development; to the fledgling worried about covering rental and operations costs. For those still working to open their doors the most significant problems are access to capital and government licensing and registration requirements.

This year alone the Brooklyn Business Solutions Center handled more than 2,500 business cases. One in every four entrepreneurs who have come to us for assistance in starting or growing their small business has listed “financing assistance” as a priority. Raising money can be difficult and time intensive. The process is made more challenging when the business owner is unaware of the options and requirements for business financing. The Business Solutions Center’s financial services program assists entrepreneurs in assessing their financing needs, preparing their loan packages and connecting them with the lenders and loan products best suited to their needs.  This calendar year we helped more than 40 businesses attain over $2 million in small business financing. The sources of these funds are banks and other traditional lenders, non-profit lending organizations like BOC Capital Corp., ACCION NY and Brooklyn Cooperative FCU who provide micro-loans to businesses unable to access credit from banks, and finally specialized lenders like the Hebrew Free Loan Society.  While there are many entrepreneurs who are unable to get the credit they want, when they want it, our challenge at the Brooklyn Business Solutions Center is to set them on a path that leads to eventually receiving access to the credit they need.
 
The Brooklyn Chamber and SBS through the Business Solutions Centers and other economic development organizations like Brooklyn Economic Development Corporation; Business Outreach Center and CAMBA have done a good job of being a clearinghouse for this information. While the Business Solutions Centers have drastically improved the delivery of business services citywide there is more work to be done.  Further action should be taken to encourage and enable businesses that currently qualify for small loans from alternative lenders to make the transition to bankability. These businesses often need more capital than is currently available from alternative lenders, especially in the outer boroughs. Unfortunately, these businesses may not yet qualify for bank financing. Alternative lenders with a strong track record and demonstrated capacity should be encouraged to offer larger loan amounts in these situations.

Additionally, financial literacy programs, for both current and future entrepreneurs, are essential in ensuring not only sound money management practices in the business, but also good access to inexpensive credit. Economic development organizations like the Brooklyn Chamber are ideal vehicles for delivering these programs at the workplace for employees who often become future entrepreneurs. Many of the entrepreneurs who are forced to defer their dreams as they deal with the consequences of poor financial decisions could have avoided their current struggles had they properly understood even the most basic principals of the financial system.

Many entrepreneurs unfamiliar with the legal requirements for opening a business also come to us seeking assistance.  Business Solutions Center staff uses the following resources to assist them:

• Online Permit Assistance and Licensing (O.P.A.L.) which provides industry-specific information on both state and city licensing requirements;
• NYC SBS Easy Start Business Guide which provides general information on starting a small business in NYC;
• NYC SBS Industry specific start-up guides which provide detailed licensing and start-up information for several highly regulated businesses, and;
• NYC SBS Business Outreach Team which provides guidance and assistance to entrepreneurs who have specific issues in their interactions with the city, while also offering some assistance during business emergencies.

Anyone seeking to open a business in New York City is better off now than he/she was a decade ago. Back then, there was no location, standardized throughout the boroughs, for potential business owners to find business planning, financial services and government licensing and regulations information at the same time. Today SBS not only provides access to these services, but also connects entrepreneurs to the many resources available through private sector and non-profit business assistance organizations.  Thank you for giving me this opportunity to testify. I would be happy to answer any questions you might have.