Understanding the impact today's weak economy is having on the state's small businesses and access to credit is a challenge, the Greater Providence Chamber of Commerce testified last week in support of Article 15 in the Governor's proposed supplemental budget.

 

If approved, the provision would create a $25 million supplemental small business loan program that would provide additional guarantees to private companies securing a loan through the Small Business Administration (SBA). Currently the SBA guarantees small business loans between 50 and 75 percent. The Governor's proposal would increase that guarantee to 90 percent, creating more opportunity for local banks to lend with less risk.

 

“We at the Greater Providence Chamber of Commerce think this is a reasonable and sensible approach for the state to stimulate economic activity among the state's small businesses,” said R. Kelly Sheridan, lobbyist for the Chamber. “The proposal leverages the state's dollars and the state's risk is shared with the SBA and financial institutions.”

 

The Chamber again testified in front of the House Finance Committee late last week supporting the passage of Article 14 of the proposed supplemental budget. If passed the measure would reinstate a tax credit that enables qualifying small businesses to take a tax credit against their Rhode Island state filing for guarantee fees paid to the US Small Business Administration (SBA).

 

In 2005 state lawmakers repealed this tax credit, which reimbursed small-business owners for certain loan fees. According to the SBA the repeal has negatively impacted the amount of loan applications.

"Rhode Island's small businesses are the backbone of our economy and right now they are definitely hurting," said Paul DeRoche, senior vice president of Government Affairs at the Chamber. "This is yet another positive step in easing the access to capital for small business and jump starting the small business economy in this state."

 

For more information on the Governor's Supplemental Budget Click here