PROVIDENCE – Gov. Donald L. Carcieri signed a law Tuesday that increases to $60 million the amount of loan guarantees available for businesses through the R.I. Industrial Recreational Building Authority (IRBA).
Officials hope the legislation will make it easier for small businesses to get capital amid continued credit constraints, because the state will pay off a loan if a firm defaults. House Finance Committee Chairman Steven M. Costantino, D-Providence, described it as “a relatively low-risk, low-cost investment for the state.”
IRBA’s loan-guarantee limit had been $80 million until 2008, when the General Assembly reduced it to $20 million due to lack of demand. But demand has picked up lately, with $38.1 million in guarantees requested this year.
Carcieri had suggested raising the limit back to $80 million, but lawmakers opted to stop at $60 million.
“The No. 1 issue I hear from business owners is the need for greater access to capital,” the governor said. “Increasing the IRBA ceiling to help our small businesses expand is the first step of our multi-faceted approach to support our business community, put people back to work and stimulate our economy.”
Carcieri signed the law at Capco Steel LLC’s headquarters on Acorn Street in Providence. He was joined by legislative leaders, R.I. Economic Development Corporation Executive Director Keith W. Stokes, General Treasurer Frank T. Caprio and Providence Mayor David N. Cicilline.
Capco will be the first company to use the expanded IRBA guarantee. Webster Bank is providing the company with a $26 million loan package, made up of a $6 million IRBA-backed bond and a $20 million line of credit.
Capco, which currently employs 425, expects to hire another 105 people to retrofit and expand its facilities and buy additional equipment.
“In 2008, we made a decision to diversify our business to take advantage of the high end ornamental steel market, and started to refurbish and buy new equipment, right as the recession hit,” Capco CEO Mike Caparco Sr. said in a statement. “With today’s commitment from the state and Webster Bank, we have the investment we need to grow our company and add employees.”
Senate Finance Committee Chairman Daniel Da Ponte, D-East Providence, also took a swipe at the banking industry on Tuesday, saying banks “have tightened lending out of fear and greed.”
Additional information is available at riedc.com.
