State Senator John A. DeFrancisco announced that the New York Senate passed legislation today, May 15, 2012, which would give state agencies the authority to determine whether a letter of credit is needed for a state contract, and would limit the amount of the letter of credit to 3 percent of the total contract award.
“A three percent cap on a letter of credit would help small and medium-sized businesses, because a letter of credit requirement adversely impacts a company’s ability to secure a loan, and it ties up resources that a company needs for operating expenses and growth,” said Senator DeFrancisco.