By Patrick Anderson
PBN Staff Writer
PROVIDENCE â€“ The R.I. Small Business Loan Fund has lowered its average interest rate from 7.5 percent to 5.75 percent, the R.I. Economic Development Corporation announced Thursday.
The public financing program experienced a sharp downturn in applications in the past year and has been looking to become more attractive to businesses.
The new rate is based on the current prime rate of 3.25 percent plus 2.5 percent.
â€śIt is critical that we do everything possible to encourage small business owners to grow their companies in Rhode Island, and we want to do everything we can to help them succeed,â€ť Gov. Lincoln D. Chafee said in a news release. â€śLowering the SBLFC interest rate is one of the many ways in which Rhode Island is building a more competitive business climate where companies, large and small, can thrive.â€ť
Launched in 1986 and seeded by federal grants, the Small Business Loan Fund provides financing for businesses turned down by private lenders and has been self-sustaining since 1996.
The program saw interest from businesses decline after the failure of the stateâ€™s $75 million loan guarantee to 38 Studios LLC last summer.
The Small Business Loan Fund provides financing packages from $50,000 to $250,000 for projects including land acquisition, building improvements, equipment purchases, new construction, and working capital. Loan terms run between five and 10 years.