Small business is the lifeblood of Rhode Island’s economy.
We have more than 95,000 small businesses in this state employing over half of the state’s private workforce — our friends, our neighbors and our family members.
Behind every small business in Rhode Island there’s a story about someone’s dream. It’s the story of their courage to take a risk and their perseverance to succeed.
I meet with a lot of small business owners to listen to their stories. The two lifelines they need most to be crazy successful are a qualified workforce and access to capital.
I’m proud to join Treasurer Seth Magaziner in announcing the “Bank Local” program to help small business get an infusion of capital. This is an innovative plan to incentivize local banks and credit unions to make loans to qualified small businesses and, in return, receive a matching state deposit into that bank or credit union.
Why should the Rhode Island treasury put dollars into the Bank of New York when it can deposit into People’s Credit Union, Navigant or Washington Trust, and, dollar for dollar, make loans up to $250,000 to small businesses in this state? It just makes sense.
If you’re a first-time small business owner, a minority, or a woman-owned business, the state will match that loan with a two-to-one cash deposit in that financial institution. So a $250,000 loan to a new hair salon or gym on Main Street means the local bank or credit union receives a $500,000 deposit. This is big news for small business in our state.
To be clear, the state is not making the loan; the participating financial institutions make them. The state is simply moving matching dollars into local banks and credit unions that support Main Street.
Rhode Island is the first state to do this, and so far 57 loans have been written to businesses with fewer than 100 employees. If popular, this program could grow beyond $30 million in the future.
This news comes on the heels of the Rhode Island Foundation’s report on the status of small business in Rhode Island. It’s a good read at www.rifoundation.org. A resilient ecosystem attracts investment and good talent and brings economic security to local communities.
One of the recurring concerns in Small Business Committee hearings is “How does small business navigate the network of services and capital available in Rhode Island?” Many small businesses don’t even know of the Bank Local program I describe here or the direct loans and micro-loans available at Commerce RI through $5.4 million dollars allocated by the General Assembly to help small businesses. That’s why I’ll be joining Liz Tanner, EVP of Business Navigation Center at Commerce RI, at the Newport County Chamber of Commerce on Wednesday morning, April 5, to share how small businesses can connect to so many resources.
From a policy standpoint, Rhode Island must support small business because it’s the underpinning of the state’s economy and our communities. As consumers, we shape the small business success stories in our neighborhoods when we buy local, and keep the dreams alive.
Rep. Deborah Ruggiero is chairwoman of the House Small Business Committee and serves on House Finance. She represents District 74- Jamestown and Middletown. She resides in Jamestown.