The New York City Economic Development Corporation and Capital Business Credit have joined forces to launch the New York City Fashion Production Fund.
The $2 million public-private fund will provide financing for production at below-market rates to emerging New York City-based designer brands in order to bolster manufacturing in the five boroughs. Five to 10 labels are expected to benefit from the first round of financing, according to JoBeth Tananbaum, director of the New York City Fashion Production Fund. Loan recipients will have 60 to 120 days to pay off their loans, which will range from $50,000 to $300,000.
The NYCEDC and CBC, a commercial financing company, each contributed $1 million to the fund.
Within four years, the New York City Fashion Production Fund expects to issue as much as $32 million in financing. “The goal is to help as many designers as possible. ‘The more the merrier’ is how we look at it,” said Tananbaum, who also serves as CBC’s vice president of business development.
NYCEDC president Kyle Kimball said, “The Fashion Production Fund was created to cultivate the next generation of emerging designers and promote manufacturing here in New York City, as well as to attract new talent — all of which will reaffirm New York City as the leading global destination for the fashion industry.
In order to be eligible, applicants must have produced a collection for at least three seasons; they must be New York-based; manufacture the majority of their goods here, and have purchase order receipts from confirmed credit-worthy customers. As of today, fund seekers will be able to apply by filling out an online questionnaire.
In the next three or four months, or potentially sooner, the Fashion Production Fund will match recipients with seasoned industry executives, based on their individual needs, who will serve as mentors.
Tananbaum dismissed the suggestion that it might appear that CBC could potentially have first dibs on working with fund recipients once their tenure was over. Tananbaum insisted that the fund is a citywide effort involving multiple entities. She noted that they expect some applicants to have their own factoring in place. In addition, while other financial institutions such as Hilldun and Geneva Factors have not yet committed to the initiative, both companies are included on the list of recommended factoring resources on the fund’s Web site.