PROVIDENCE – Despite turmoil in national financial markets, the Business Development Company of Rhode Island (BDCRI), the state’s preeminent provider of gap funding, wants to make it clear: It is ready to lend to local companies and has substantial resources to do so.

“One of the most important things a business can do is continue to invest in its own growth, even during uncertain times,” said Garrett B. Hunter, president of BDCRI, a non-bank lender that provides debt and equity financing to promising but undercapitalized local companies. “We are prepared to assist and have a sufficient reserve of $5 million that we can put to work immediately.”

Gap financing provides funds to borrowers beyond what their senior lender, usually a bank, is willing to lend, BDCRI said.

A senior lender typically will lend up to some limit based on the borrower’s financial condition and available collateral. Once that limit has been reached, the bank may not want to lend more.

BDCRI said its financing fills the gap. Often taking the form of subordinated or mezzanine debt, gap funding provides needed capital.

“Many businesses are planning to grow over the next year or two, and we will continue to work with local banks to help companies emerge from the current downturn as strong competitors,” said Hunter.

Hunter said his organization, which is state-chartered, can lend up to $500,000 for any single transaction and will bring in other partners for larger transactions up to $3.5 million.

The BDCRI, as the Rhode Island agent for the New England Certified Development Corporation, also helps companies fund the acquisition of fixed assets through the U.S. Small Business Administration’s 504 program, which generally only requires a 10 percent down payment.

In addition, the interest rate on the SBA component (40 percent of the total loan) is fixed for the life of the loan, which may extend up to 20 years.

The Business Development Company of Rhode Island, based in Providence, provides direct and gap financing to companies in Rhode Island and nearby Massachusetts and Connecticut that need funding for working capital, product development, fixed-asset purchases and business acquisition. Member banks of the BDCRI include: Bank of America, BankNewport, Bank Rhode Island, Centreville Bank, Citizens Bank, Coastway, Home Loan and Investment Bank, FSB, Sovereign Bank New England, The Washington Trust Co. and Webster Bank. For more information about the Business Development Co. of Rhode Island, visit www.bdcri.com.