Over the past 18 months, we’ve seen a historic rise in interest rates while the Federal Reserve has worked to curb inflation from post-pandemic challenges. The rising cost of capital has impacted borrowers across our community with interest rates that haven’t been seen since the early 2000’s. One of the tools that CNB and banks across NYS have used to help our customers is the participation in the NYS Linked Deposit Program.

In 1994, the state began the Linked Deposit Program to assist and encourage firms, manufacturers, and small businesses to make investments. This program offers reduced-rate financing to make it less expensive to borrow money. Under this program, loans can be obtained by qualifying businesses through commercial banks, savings banks, savings and loan associations, farm credit institutions and the New York Business Development Corporation at a reduced rate. Interest rates for these loans are subsidized by the state at the individual loan level. Funds are deposited by the state in the same amount as the loan to the lending institution but earns less interest on the deposit. This allows the lender to transfer the interest rate savings to the borrower. At the end of the loan term, the bank returns the initial deposit to the state.

Most eligible businesses qualify for up to a 2 percent interest rate reduction, while others like agricultural firms, technology and innovation businesses, certified Minority Women Owned Business Enterprises (MWBEs), certified Service-Disabled Veteran-Owned Businesses (SDVOBs) and those businesses located in highly distressed areas may qualify for up to a 3 percent reduction. Since the program’s inception in 1994, LDP has lowered the interest rate for over 5,900 loans, resulting in $2.02 billion in lending and leveraging $4.16 billion in new capital investment by businesses across New York State. In 2022, 34 projects were approved across New York State totaling $20.70 Million.

Since the fall of 2022, the LDP processed 12 applications from CNB, totaling over $11,000,000. Help from the LDP has proven to stimulate the economy by allowing businesses to expand, become more competitive, upgrade their equipment and develop new products. To learn how to apply or find more information, visit esd.ny.gov/linked-deposit-program or contact us at (585) 419-0670 today.

This material provided by Greg Helmer.