The United States Department of Transportation (DOT) announced Wednesday that Carver Federal Savings Bank has been selected as New York’s first participating lender in the agency’s Short Term Lending Program (STLP).
The STLP is a loan guarantee program that helps small and disenfranchised businesses gain access to the financing they need in order to participate in DOT-related contracts to maintain, rehabilitate, or revitalize any local, state, or federal mode of transportation. Generally, these types of businesses are unable to compete for transportation-related contracts because they lack the funds and resources.
Under STLP, the DOT guarantees up to $75,000 in loans and a revolving line of credit. The line of credit covers a one-year period and can be renewed for up to five years as long as the business remains eligible. The interest rate of the loan is a variable rate tied to the prime interest rate.
“Carver is delighted to support the United States Department of Transportation and the Obama administration in their quest to expand jobs for Americans,” said Deborah C. Wright, chairman and CEO of Carver Bank (No. 1 on the BE100s banks list with $789.9 million in assets).
Under the Recovery Act, the $20 million was allocated to the DOT for Disadvantaged Business Enterprise (DBE) bonding assistance, which reimburses bonding premiums and fees incurred by DBE’s competing for or participating in eligible transportation infrastructure projects receiving Recovery Act funds.
In order to receive a loan through STLP, businesses must have received DOT DBE certification from the state or local transportation agency or have been certified by the Small Business Administration (SBA) either as a small disadvantaged business or HUBZone or received a disability rating by the Veteran’s Administration and be certified as a Service Disable Veteran Owned Small Business (SDVOSB). The company should also have an established track record and be current on all federal and state taxes.
Leroy Brown, president of The LCB Group, a New Jersey-based dump-truck hauling firm used an STLP loan to expand his company.
“Most often we [DBE’s] don’t get an opportunity to get the contract award because we don’t have the necessary capital to fund the project through its duration, so we have to pass on it or take a lesser amount,” explains Brown, who recently received a contract to work on the New Jersey Transit’s $8.7 billion Mass Transit Tunnel. “[The loan] gives us the opportunity to participate with the larger projects, get the necessary equipment needed to work the project, and grow our business.”
Loan applications can be obtained at www.osdbu.dot.gov. Applications and a $150 application fee may be forwarded to the DOT or an STLP bank.