PROVIDENCE – Rhode Island has seen double-digit increases this year in small business loans backed by the U.S. Small Business Administration, the agency reported Thursday.
The agency guaranteed 57 loans to Rhode Island businesses under the 504 program during the 11-month period from October through August, representing a 39 percent increase over the same period a year earlier. The program is typically used by small companies to purchase commercial real estate or heavy machinery and equipment.
In addition, the agency backed 15 microloans to Rhode Island businesses during the same period, representing a 25 percent increase over the prior year. Those are small loans averaging about $13,000, typically used by startups, newly established companies and growing small firms.
“I believe this increase in lending is a testament to the confidence of small-business owners as a direct result of the [federal tax overhaul]” that went into effect in January, said Mark S. Hayward, the SBA’s Rhode Island district director.
“The optimism of entrepreneurs is evident by their willingness to spend on their infrastructure and expand their businesses, all while knowing that this administration is dedicated to the growth of small business,” Hayward said.
The agency also backed 298 loans to Rhode Island businesses through the 7a program, which is often used by small firms trying to buy other businesses or to create working capital. The SBA did not provide the previous number of 7a loans within the state.
Overall, Ocean State businesses received a total of 370 loans guaranteed through the SBA worth about $104 million from October through August, the agency reported.
The SBA acts as conduit between small businesses and banks and other lenders, with the commitment of federal funds as a safety net should businesses default on those loans.
Rhode Island’s top five cities in SBA lending activity during the period: Providence, with 70 loans totaling more than $13 million; Warwick, with 37 loans totaling $7.4 million; Cranston, with 32 loans totaling $7.1 million; East Providence, with 24 loans totaling $12 million; and Johnston, with 17 loans totaling $3 million, according to the agency.
Scott Blake is a PBN staff writer. Email him at Blake@PBN.com.