Velazquez: NYC Small Businesses to Take $56 Million Hit from Sequester
Local Firms Will Lose Access to Loans, Contracts, and Training
WASHINGTON, March 4, 2013 /PRNewswire-USNewswire/ -- According to a report released today by Rep. Nydia M. Velazquez (D-NY), the Ranking Democrat on the House Committee on Small Business, New York City's small businesses stand to lose $56 million as a result of the sequestration, which went into effect March 1st. For the City's 150,000 small businesses, this would mean a shortfall in capital and credit, fewer federal contracts, and a drop-off in critical business assistance services.
"It is undeniable that New York City's small businesses will feel the effects of sequestration head on," said Rep. Velazquez. "It means less loans, fewer federal contracts, and a sharp reduction in business counseling, resulting in lower growth and fewer jobs in all five boroughs."
The sequester will result in a $25 million reduction in Small Business Administration (SBA) lending to the City's small businesses, meaning that fewer entrepreneurs will be able to get the funds needed to start or expand a business. Beyond curtailing the SBA's lending initiatives, the indiscriminate budget cuts would harm small firms that work for the federal government as contractors. In New York City, this would mean a loss of $158 million in contracting opportunities across all businesses, and $31 million for smaller firms. Additional cuts to SBA's small business development programs, which assist companies in accessing the federal marketplace and securing assistance to start and grow their firms, would be significant. In New York City, the closure or reduction in hours of these centers would compound the impact of the sequester.
"For New York City's businesses, winning a federal contract, securing a loan, and being able to access counseling services can often make the difference between success and failure," Velazquez noted. "The sequester means that small firms will have to look elsewhere for similar opportunities and assistance, which unfortunately will be extremely hard to come by."
In New York City, last year the SBA provided nearly 1,000 loans for almost $500 million dollars – giving small firms access to capital that they would not otherwise be able to secure. Local small businesses were awarded over 24,000 contracts for more than $453 million last year – affording them the opportunity to work for one of the world's largest customers – the U.S. government. SBA-supported counseling centers, including Small Business Development Centers and Women Business Centers, are located throughout the City and help thousands of individuals become entrepreneurs each year.
The full report may be downloaded at www.house.gov/velazquez.
CONTACT: Alex Haurek
SOURCE Representative Nydia M. Velazquez, Ranking Member, House Committee on Small Business