Buddy on Business

Rhode Island is a small business state. Our economy is powered by the entrepreneurial spirit of the thousands of men and women who risk money to make money and create jobs in the Ocean State. So it should be no surprise that when small businesses struggle the state economy grinds to a halt. One of the primary reasons for our struggles is that banks aren’t lending as much as needed.

The lack of access to capital, not just in Rhode Island but across the country, has been well documented. You know because as small business owners you live this reality every day. Many of you would love to purchase new equipment, increase production or hire more employees but you are frustrated by banks that aren’t willing to lend you the necessary capital. But don’t give up when the traditional big banks that got us all into this mess turn you down. There are alternative resources through which you can access capital that you need to start, update or take your company to the next level.

The Rhode Island Office of the United States Small Business Administration (SBA) can be a tremendous resource in these difficult times. The SBA has several loan guarantee programs that can help you access capital. The SBA doesn’t loan directly but by guaranteeing the loan they reduce the risk of non-payment which makes their lending partners more willing to lend money to small business owners.

For example, the SBA’s CDC/504 loan program is a partnership between the SBA and certified development companies that lends capital to small business looking to expand or modernize real estate and equipment. Additionally, the SBA offers Microloan Programs that help small business owners get access to up to $35,000 in working capital through short term loans with SBA lending partners. These funds can be used to meet every day needs of your business such as purchasing inventory, supplies, fixtures, equipment and machinery.

Locally, there are also municipal programs like the Providence Economic Development Partnership that offer loan programs for companies looking to start up or expand. When I was Mayor, my administration saw these loan programs as one of our primary tools for redevelopment of Providence’s downtown and neighborhoods. By investing in small business owners with big ideas we were able to finance businesses that improved the atmosphere of our city from Federal Hill to the Smith Hill. And the best part about it? Not only did small businesses get the funds they needed to succeed but, during my administration, these business owners also paid back the money and the taxpayers of the city got both a tangible and intangible return on investment.

So look into these government programs when the banks turn you down. The key to making it through these tough economic times is taking advantage of all the opportunities that are out there and programs like these can go a long way to helping you sustain and grow even when the economy is lagging.

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