PROVIDENCE – BankNewport and Freedom National Bank have joined General Treasurer Seth Magaziner’s Bank Local program, an initiative that incentivizes banks and credit unions to make loans to local small businesses.
Bank Local moves the state’s cash, which historically has been deposited in big national and international banks, to Rhode Island credit unions and local banks. Since the program was launched in 2017, more than $26 million has been moved into such Rhode Island institutions, supporting loans to more than 235 small businesses, according to Magaziner’s office.
Rhode Island banks and credit unions that already have been in the program are: Bank Rhode Island, Bristol County Savings Bank, Centreville Bank, Customer’s Bank, Home Loan Investment Bank, Navigant Credit Union, People’s Credit Union and The Washington Trust Co.
“Small businesses are essential to Rhode Island’s economy. Too many entrepreneurs and small-business owners have difficulty getting loans to expand their businesses and hire more people,” Magaziner said. “With the Bank Local program, we are moving millions of dollars to community banks and credit unions when they make loans to small businesses in Rhode Island.’ ”
When a participating bank or credit union makes a $100,000 loan to a small business in Rhode Island, for example, the state will match it with a $100,000 deposit into that bank or credit union. However, the state has no role in selecting or approving small-business borrowers. Lending decisions are made by the participating banks and credit unions.
In addition, Bank Local offers a 2-to-1 match for loans made to first-time business owners, as well as women-, minority-, or veteran-owned small businesses in Rhode Island. Nearly 30% of current loans made under Bank Local were to such businesses, according to Magaziner’s office.
“Treasurer Magaziner has been a small-business advocate and the Bank Local program is a great tool for Freedom National Bank to gather deposits and reinvest by lending them back into the Rhode Island small-business community,” said Freedom National Bank President Tony Botelho.
“Being able to help small businesses expand, create jobs and thrive has always been our commitment as a Rhode Island community bank,” said BankNewport Executive Vice President and Chief Operating Officer Leland R. Merrill. “For this reason, we’re excited by the Treasury’s shared focus in support of local financial institutions [such as] BankNewport and our efforts to improve and promote economic growth of small businesses and our communities.”
Scott Blake is a PBN staff writer. Email him at Blake@PBN.com.