CNY Quasi-Equity Fund Success Story!

Critical Link (CL) began business in Syracuse in 1997 as a computer engineering services firm, providing engineering expertise to companies in a number of different industries. After 10 years as a services-based business, CL began to branch out into internal product development, in particular the development of a line of scientific cameras. These cameras are a key component in spectroscopy instruments used in pharmaceutical and industrial control applications.  The company had the engineering know how to embark on these product developments, but finding the necessary funding presented a problem as banks had tightened credit as a result of the financial crisis.  The firm needed to find alternate sources of financing that wouldn’t require giving up ownership or control of CL.

“I contacted Mike Rosanio from the Central New York Regional Planning & Development Board and Peggy Adams from the Greater Syracuse Business Development Corporation (GSBDC),” said John Fayos, President of CL.  They told me about the Central New York Quasi-Equity Fund (CNY QEF).   It’s designed to be a flexible loan program than can support the growth of net wealth generating companies that have the potential for creating quality jobs in Central New York.  Funding participants in Onondaga County include the Onondaga County Industrial Development Agency (OCIDA), Central New York Enterprise Development Corporation (CNY EDC) and the Greater Syracuse Business Development Corporation (GSBDC).  Together, these agencies can provide up to $300,000 in financing ($100,000 each) enabling a business to implement their business plan in a timely manner and allow them to retain ownership of their company while remaining in CNY.

“After learning about the program, it looked like it would be a good fit for us”, said John Fayos. “We worked out a $300,000, five year loan to support our camera development efforts and that loan proved critical in enabling us to complete our camera products and move them to production.  CL has recently retired the loan, and the camera products that they helped bring about have contributed more than $500,000 in additional annual revenue for CL.  The CNY QEF program provided the needed capital at a time when obtaining product development funds was not easy for a small company”, said Mr. Fayos. “The process of obtaining the loan was straight forward, the interest rates competitive, and we will certainly look to the equity program once again if the need arises”.

This loan was made possible through the assistance of Senator John A. DeFrancisco, whose efforts secured $301,000 to recapitalize the CNY QEF in 2008.  When leveraged by additional investment from GSBDC and its lending partners, the program has funded more than a dozen projects, totaling close to $3 Million and creating or retaining over 200 jobs.