PROVIDENCE – The Carcieri administration and state economic development officials met yesterday with top executives from many of the state’s banks and credit unions to start developing a state-assisted plan to ease the credit crunch for local businesses.
“What we’re looking at that we could do fairly quickly … is what role the state could play in working with some of the banks as a way to help some of the small business,” Gov. Donald L. Carcieri told reporters at the R.I. Convention Center today following his forum on the state’s economy.
Carcieri cautioned that state officials still are in early discussions with banking executives, but he and Saul Kaplan, executive director of the R.I. Economic Development Corporation, said they are considering some type of small-scale loan guaranty program that could possibly piggyback on the U.S. Small Business Administration’s existing programs.
“Only a piece [of a loan],” Carcieri said. “I’m not putting the state in the business of guaranteeing loans, that’s what SBA does. But there are things we can do to top that up a little bit.”
Details of such a state program have yet to be worked out, the governor noted. “All these are under review,” he said.
In a separate interview, Kaplan said the meeting with banking executives focused on creating “a public-private partnership” to make capital more accessible to the state’s small businesses. Officials say businesses have struggled recently because financial institutions have tightened lending standards or withdrawn lines of credit because of the ongoing turmoil in the financial markets. (READ MORE)
“We want to make sure when good loans can be made, we’re doing everything possible to make that happen,” Kaplan said. He said the EDC is examining a program that would provide some guarantee of fixed-asset loans, similar to an old program called the Industrial Recreational Building Authority.
State officials are also interested in working with the banks to somehow add capital to the EDC’s Small Business Loan Fund Corporation, which lends to small companies when private financing is not available, Kaplan added.
The R.I. Economic Development Corporation is a quasi-public agency established to promote business development, preservation and expansion in the state and undertake port projects in Rhode Island. Additional information about the EDC and its financing programs, including the Small Business Loan Fund, is available at www.riedc.com. News and information from the R.I. Governor’s Office are available at www.governor.ri.gov.
