Data Center Feasibility Study in New York

New York data centers: a small business, not a hyperscale one

The data center cell in New York is dominated by small hosting and processing businesses, not by large facilities. SBA approved 66 loans from FY2017 to FY2026, $17.5 million in total, so the $132,500 median is just 0.64x the nationwide median. Half of loans fall between $50,000 and $250,000. Despite that, New York ranks 3 of 52 for the class, and the class stands 19 of 39 inside the state, with a location quotient of 1.12x. Nothing in the cell clears the distinctness margin.

Because the business code also holds data processing and hosting firms, and colocation buildings cannot be separated from them, these loans mostly fund equipment, software and working capital for service companies, rather than purpose-built server halls. That is why 64 loans sit under 7(a) and only 2 under 504, with no franchising at 0.00%. A reader hoping to compare a New York hyperscale build with these dollars would be misled.

Lenders and counties

TD Bank, National Association leads with 13 loans and $958,600. Manufacturers and Traders Trust Company has 10 loans and $2.3 million. Newtek Bank, National Association adds 7 loans worth $780,000, and JPMorgan Chase Bank, National Association has 6 loans and $1.0 million. Nassau County leads with 12 loans; Kings, New York and Suffolk each show 8, and Monroe has 7, so Long Island and the city lead with Rochester behind.

Counts fell from 13 in FY2017 to 2 in FY2020, then returned to 11 in FY2024 and again in FY2025, when the dollars reached $5.5 million. The cancellation floor is 8.2% for New York approvals through FY2024. No charge-off rate appears for New York, since too few disbursed loans back it, and that silence does not mean zero losses.

Diligence for a New York facility

A study must first decide what is being financed: a technology services company, a colocation operator or a physical facility. For a facility, power cost and availability, cooling, connectivity and zoning for noise and generators dominate. Demand means contracted customers and their terms. Coverage hinges on utilization ramp, and the appraisal on whether a specialized building has any value to another user.