After 20 years of renting the building where he has his Middletown car dealership, Hyundai of Newport, Paul Mika finally bought the facility for $2 million with financing through a U.S. Small Business Administration loan originated by BankNewport.
“I tried to buy the building three times before and finally the owner gave in and sold it to me,” said Mika. “This was the first time I used an SBA loan. My mortgage is less than my lease payment.”
Even with his long-established dealership, Mika said the loan under the SBA’s 504 program, which provides small businesses with long-term, fixed-rate financing to acquire real estate and major fixed assets, gave him a clearer perspective on the future of his business.
“It makes me feel like I have control over my destiny,” said Mika, who finalized the loan in December 2011. Mika’s loan was through BankNewport, the Rhode Island bank that ranks first in the state for the fourth consecutive year in the number of loans through the SBA 504 program.
Overall SBA-guaranteed lending in Rhode Island for the fiscal year ended Sept. 30 was down nearly 22 percent from the previous year, though some local bankers see that as a potentially positive sign for the economy.
BankNewport originated 17 SBA 504 loans totaling $7.7 million in the fiscal year that ended Sept. 30. Under the 504 program, the bank is responsible for 50 percent of the financing, the SBA 40 percent through a certified development company and the borrower 10 percent.
BankNewport also approved $1.9 million for SBA’s 7(a) loans, the most common program that provides capital for businesses to use for general purposes.
In 2012, BankNewport originated $11.5 million in SBA loans out of $67 million in commercial lending, said bank Vice President Doug Hanson.
In 2013, BankNewport’s SBA lending totaled $9.6 million. The bank’s commercial lending is expected to total $90 million in 2013, said Hanson.
“Last year, our SBA lending was 17 percent of our commercial lending and in 2013 our SBA lending is 11 percent of our commercial lending,” said Hanson. “I think loan demand is there. I think loan growth is there.”
Join PBN for the best networking event and party of the winter - January 15, 2015 - the Book of Lists Party at the Providence Public Library. Reserve your spot by December 31st and get a holiday gift from PBN!
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.