Capital stream diverted by recession but not gone

The concept is simple enough. You need money to make money.
But as every business owner knows, it’s easier said than done.
This special section, Capital Access: Small Business Financing in Rhode Island, is designed to help small businesses understand a little more about the capital landscape in the region as well as highlight some of its success stories.
For instance, Green Grocer, Rhode Island Veteran-owned Small Business of the Year, has a success story, but it’s not a simple one. The owner of the Portsmouth-based grocery store, John Wood II, gives a lot of credit for his success to Coastway Community Bank’s efforts over the last eight years (you read that right, eight years!).
Apparently, many small businesses benefited from Coastway’s efforts, because through the first half of the current federal fiscal year, the Cranston-based lender has made the most 7(a) and 504 loans in Rhode Island, a total of 37 for $7.6 million. That leading position is not unusual. In fiscal 2013, Coastway made 53 SBA-related loans, No. 2 in number among local lenders, for $11.2 million, which was the leading dollar amount.
Coastway is not alone, as there has been a concerted effort by smaller lenders to do more commercial business through SBA programs, especially since the Great Recession. The state’s large banks, including Bank of America, Citizens Bank and Santander Bank (formerly Sovereign Bank), all have seen a decline in their SBA-related small-business lending.
But the region’s community banks and credit unions have picked up the slack, with only Citizens (at No. 4 on the list) among the top eight SBA lenders for fiscal 2014. It’s not that entrepreneurs don’t have access to capital. It’s just that they should be looking in new directions as they tend to their enterprises’ success.

Mark S. Murphy
Editor

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