PROVIDENCE, R.I. (12/15/08)--Eight credit unions and banks in Rhode Island have pledged $165 million for loans to small and midsize businesses during the next two years as part of a state economic stimulus package announced Thursday by Gov. Donald L. Carcieri. The six-part stimulus package aims at assisting smaller businesses with the recession and credit crunch (The Providence Journal
Dec. 12 and Providence Business News
Dec. 11). The credit unions’ and banks’ efforts will be monitored by the Rhode Island Economic Development Corp. (EDC). Another $2.4 million from the same credit unions and banks will be placed into an existing small-business loan fund, monitored by EDC. In addition, the plan will:
* Provide an increase of $240,000 to $700,000 in the amount that EDC’s small-business loan fund sets aside for micro loans of less than $50,000 for very small businesses run by young, new entrepreneurs. * Offer state-backed guarantees for certain small-business loans to supplement loan guarantees by the U.S. Small Business Administration (SBA), to help reduce loan risk to lenders. * Restore a state tax credit to help small businesses cover the cost of fees paid on SBA-guaranteed loans. * Offer $5 million in loans pledged by the Business Development Co. of Rhode Island, a non-bank lender, for businesses needing more financing than their senior lenders are willing to provide.
The credit unions and the sums they are pledging include Navigant CU, Smithfield, pledging $5 million; and Coastway CU, Cranston, $25 million. Banks in the program include Bank Newport, Bank Rhode Island, Citizens Bank, Webster Bank, The Washington Trust Co., and Randolph Savings Bank.