Small businesses, because they are in a growth mode, often require access to long-term capital. Too often, however, they have access only to short-term loans due to their lack of credit history. These loans are amortized, or paid back, within tighter time frames, making business expansion difficult. The fund finances companies that have difficulty obtaining sufficient or appropriate financing because they are too young or too small or because their growth outpaces available funding. It structures transactions to meet the needs of its clients, using debt, equity, and debt-equity combinations.
Small businesses represent one of the fastest-growing business segments in New York.
It is also one of the riskiest. Hoffman admits that she had no sales experience when she founded her company, just a business vision and the know-how she had acquired while working as a temp herself. Because such funding strengthens a company's capital structure, it often attracts interest from other lenders and coinvestors, as it did for Simpson Personnel. The assistance has reaped positive results. And the number of entrepreneurs looking for such opportunities in New York continues to rise, says Ylvisaker.