PROVIDENCE – Rhode Island will be getting a major federal financial award courtesy of the Biden administration’s State Small Business Credit Incentive.
Gov. Daniel J. McKee announced Thursday the state will receive $61.7 million from the federal business credit incentive program. McKee’s office says the American Rescue Plan Act amended the 2010 Small Business Jobs Act to reauthorize and provide $10 billion to fund the credit incentive program in response to economic impacts brought forth by the COVID-19 pandemic.
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Rhode Island was one of five states and U.S. territories chosen to receive this funding. Arkansas, Wisconsin, Guam, and the U.S. Virgin Islands were the others, McKee’s office said.
With the funding, Rhode Island will operate three programs. One, McKee’s office says, will be a $3 million capital access program to support a portfolio insurance program by establishing reserve accounts at each lender to cover losses on enrolled loans.
McKee also said that another program, a $27 million loan participation program, will provide small business loans to expand capital access for businesses located in underserved communities and/or led by historically underserved entrepreneurs, including those that do not have existing banking relationships. Lastly, a $31.5 million equity/venture capital program will target both early-stage and high-growth firms working with partners with proven track records of reaching underserved communities, the governor’s office said.
“We’re ready to continue Rhode Island’s economic momentum. This historic investment in small businesses from the Biden Administration will help us reach that goal,” McKee said in a statement. “As a former small business owner, I know how important it is to deliver critical financing to our business community to ensure we address their greatest needs. I thank President [Joe] Biden and our Congressional delegation for this award which will help further our state’s economic momentum.”
R.I. Commerce Secretary Elizabeth M. Tanner said in a statement Thursday that access to capital is often a “major hurdle” for businesses seeking to grow and create jobs. The new funding, she said, will help the state create financing programs that address the unique needs of small businesses, including those that have historically faced barriers to accessing capital.
“I encourage all small business owners, including minority-owned and women-owned businesses, to explore the opportunities offered by these funds,” Tanner said.
James Bessette is the PBN special projects editor, and also covers the nonprofit and education sectors. You may reach him at Bessette@PBN.com. You may also follow him on Twitter at @James_Bessette.
