- 1The $80M NYC Future Fund repays loans as a percentage of monthly revenue
- 2New take rate starts as low as 2%, versus a flat 9.5% in earlier iterations
- 3Run with CDFIs including CRF, Accompany Capital, Grow America and Pursuit
New York City Mayor Mamdani is promoting revenue-based financing as the core of the NYC Future Fund, a government-backed low-interest loan program for small businesses. A promotional video for the fund highlights a structural feature: repayment is a percentage of revenue rather than a fixed payment.
How the loans work
The fund's website describes the difference with a traditional term loan: principal repayments follow a percentage of monthly revenue, so payments rise when revenue is higher and fall when it is lower.
The city's announcement says earlier versions of the program took a flat 9.5% of a merchant's revenue. The new version can take as little as 2% of monthly revenue, depending on loan size and business needs.
In the video, Mamdani says the city is “building a fairer economy for the entrepreneurs that support our neighborhoods.” Small Business Services (SBS) Commissioner Kenny Minaya argues revenue-based financing is better because it accounts for sales seasonality, such as an ice cream shop with slower winters.
Who is behind it
The NYC Future Fund is a public-private partnership between the city and local community development financial institutions, including Community Reinvestment Fund, USA (CRF), Accompany Capital, Grow America and Pursuit. According to the city's press release, Mamdani took the lead on launching the $80M fund.
New York is the latest in a series of government-led initiatives to promote and expand revenue-based financing.
Source reporting: deBanked.
