Business Excellence Awards
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By PBN Staff
By PBN Staff
PROVIDENCE – The U.S. Small Business Administration supported lending totaling $68.6 million to Rhode Island businesses in the fiscal year ended Sept. 30, a decline of 21.6 percent from the $87.5 million loaned to local companies through the federal agency’s programs a year earlier.
The SBA guaranteed 317 loans through 41 financial institutions and certified development companies through its three loan programs – 7(a) Loans (the most common program provided by the SBA, designed to help businesses in a general sense), 504 loans (designed to finance major fixed-asset purchases and which require direct loans through the SBA and capital participation from the borrower) and microloans (designed to help small businesses and certain nonprofits).
Thirty-six commercial lenders made 265 7(a) Loans guaranteed by the SBA worth $51.7 million, according to figures released by the SBA Tuesday. In addition to the guaranteed loans through banks, financial institutions (including banks, credit unions and other private lenders) participating in the 504 program made an additional $21.4 million in loans to businesses that were not guaranteed, money that supplemented the $16.7 million that certified development companies loaned from capital the SBA raised through debentures and the roughly $4.5 million that the borrowing companies added from their own resources.
The local institution that made the largest number of loans was Bank Rhode Island, with 63 combined 7(a) and 504 loans, for a total of $10.3 million. Coastway Community Bank, with a loan total of $11.2 million from 53 transactions, put the most capital into Rhode Island businesses through SBA programs. Bank RI led the way on both counts in fiscal 2012 as well, making 83 total loans for $17.4 million.
Bank RI made the most 7(a) loans, with 61, for a market-leading $9.1 million. BankNewport made the largest number and highest dollar volume of 504 loans, with 17 worth $7.7 million. Bay Colony Development Corp. directed the largest number of 504 loans, 17 worth $6.2 million, while Ocean State Business Development Authority directed 14 loans worth $6.4 million. South Eastern Economic Development Corp., was the only institution making microloans, with nine totaling $238,000 in the fiscal year.
“The SBA is pleased to have supported nearly $90 million in lending to Rhode Island small business during the federal fiscal year that ended on Sept. 30,” said Mark S. Hayward, director of the SBA Rhode Island District Office. “Beginning Oct. 1, SBA eliminated fees for both lenders and borrowers for loans under $150,000. We believe this will encourage additional access to capital for Rhode Island small businesses.”
Warwick saw the most SBA loan activity in fiscal 2013, with 46 loans worth $10.8 million, ahead of the 34 loans worth $5.1 million in Providence. In fiscal 2012 Providence saw the most loan activity, however, with 45 transactions, compared with 44 in Warwick. On average, however, the Warwick loans were larger, with $13.5 million committed to the city last year compared with the $6.8 million in Providence.