Sure, running a business in the Bronx isn’t easy. There are plenty of challenges and hurdles to overcome, from the lasting effects of the pandemic to the difficult relationship between entrepreneurs and banks. But thanks to organizations like the Bronx Economic Development Corporation (BXEDC), there’s a real sense of hope for the future. We’ll dive into the work and focus of this crucial organization in this article for bronx1.one.
BXEDC’s Mission and Goals
The Bronx Economic Development Corporation (BXEDC) was founded in March 1981 with a clear initial mission: to foster a successful business community in the Bronx. The corporation supports local businesses by giving them access to funding and growth opportunities, helping existing businesses thrive while also encouraging new ones to open their doors.
BXEDC works closely with the office of Bronx Borough President Vanessa Gibson on economic development issues. Gibson has noted that similar funding programs haven’t been utilized since the Bill Clinton administration. In her view, this partnership between BXEDC and The Business Initiative Corporation of New York (BICNY) will allow them to loan working capital to small businesses. These kinds of projects not only support local enterprises but also create new jobs, fueling economic growth.
Among BXEDC’s key initiatives are:
- Providing commercial loans for businesses in the South Bronx Empowerment Zone;
- Offering technical assistance to improve commercial corridors;
- Attracting public funding for business development;
- Building a network of business support partnerships;
- Collaborating with educational institutions;
- Drawing corporate tenants to the Bronx.
BXEDC’s primary achievement has been gaining approval to participate in the SBA Community Advantage Loan Program, which has allowed it to provide working capital loans to businesses and small enterprises.
BXEDC also initiated the Green Action Challenge program to improve environmental sustainability in the borough’s educational institutions and launched the Commercial Corridor Beautification Initiative. The organization is forging partnerships with major companies to promote local businesses and is bringing on new staff and board members from various sectors.
A Spotlight on Small Business
With over 18,000 small businesses, the Bronx’s local economy is built on their backs. However, they face various structural challenges on their path to success. Approximately 70% of small businesses in the Bronx struggle to get financing, and more than half of them can’t get their projects off the ground due to a lack of solid banking relationships.
The Bronx is considered a low-to-moderate-income borough. While the region is seeing an increase in new businesses, there’s a trend of businesses closing within their first few years of operation.
BXEDC is working to meet the demand for capital in the Bronx to stimulate business activity and revitalize commercial corridors. BXEDC’s lending arm, The Business Initiative Corporation of New York (BICNY), collaborates with the U.S. Small Business Administration (SBA) program, which is aimed at creating and retaining jobs.
The Bronx Business Continuity Loan (BBCL) program was launched during the COVID-19 pandemic. At the time, an already struggling small business sector was in a critical state. Thanks to BXEDC’s support during those difficult lockdown days, many small businesses were saved. The hit that the global economy took from the pandemic is still being felt today. It’s especially important to support regions with a weak business climate, and the Bronx fits that description.
Over the last few months, BXEDC has issued a total of $1.2 million in loans to various small businesses. There are different terms for receiving funds through this program. For example, a microloan can be up to $50,000 for up to five years at a 5% annual interest rate for businesses with 25 or fewer employees. Larger loans are available for commercial development, ranging from $50,001 to $500,000 for up to ten years. In this case, loan payments will be based on the prime rate plus 1–2%.
Examples of Targeted Assistance from BXEDC
Many small businesses in the Bronx have been saved thanks to the coordinated efforts of BXEDC, the government, and banks. Most often, applications for the program come from immigrant entrepreneurs. Starting and maintaining a business in a new country is incredibly difficult.
Tobala, an Oaxacan restaurant on Riverdale Avenue, is one of the many small businesses that have benefited from these low-interest loan programs. It’s a beloved spot for locals and visitors alike, with high ratings on all the relevant platforms. On weekends, it’s hard to find an open table, and its great location and delicious, authentic cuisine add to its appeal. But at one point, the restaurant’s management had to turn to BXEDC for help. The problem was the high interest rates the restaurant was paying on its original loans. BXEDC staff helped the owners refinance some of their high-interest loans into lower-interest ones, which saved their business from bankruptcy.
Another wonderful establishment with a bright, positive name is “Cupcake Me!” Its owner, Brittany Moss, started her business baking cakes and cupcakes at home for custom orders. Her products were in high demand, but Brittany didn’t know where to get the money to scale up. After reaching out to BXEDC, she got a loan and was able to hire staff and expand her production.
You can read about the life story of a successful Bronx entrepreneur in this article.
Collaborating with Schools and Providing Consulting
BXEDC also partners with colleges and universities in the Bronx. Recently, after a rigorous selection process, BXEDC awarded Bronx Community College $1 million for programs that promote eco-friendly technology on campus. This was made possible by a grant from the New York Energy Authority as part of the Green Action Challenge initiative. Access to funding through loans and grants is just one aspect of BXEDC’s work in economic development. The organization also provides business education to small business owners in the Bronx. BXEDC staff actively work with clients, helping them create business plans, do financial planning, and prepare for obtaining loans.
At BXEDC, they understand that small businesses in the Bronx often lack the technical and financial advice needed to secure loans and achieve lasting success. For many entrepreneurs, crucial resources like help with loan applications, lending recommendations, and financial planning remain out of reach. To solve this problem, BXEDC holds specialized seminars in collaboration with local banks. This initiative became the foundation for another major BXEDC goal: to create a unique coworking and business support center that will provide one-on-one financial education, hands-on technical assistance, and direct access to capital.
The Bronx remains the New York borough with the largest number of banks, yet 17% of its residents have no relationship with financial institutions. Despite many problems, such as branch closures or high overdraft fees, banks need to work on rebuilding trust. That’s why BXEDC aims to engage Bronx banks to fund the project for a single coworking center, which will become a hub for collaboration between banking institutions, Bronx entrepreneurs, and support structures like BXEDC.
You can read about another Bronx-based organization that supports vulnerable populations in this article.