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SMALL BUSINESS BANKING IN RHODE ISLAND
Types of SBA Loans
7 ( a ): Most popular program for working capital Chances are you have a favorite neighborhood restaurant . They might have used the SBA ’ s 7 ( a ) loan program like the De- Quattro Restaurant Group did . Hayward says when the DeQuattros opened their first IL Massimo location in the old Mediterraneo location on Federal Hill , they turned to the SBA ’ s 7 ( a ) loan program to get started . Over the years they relied on five 7 ( a ) loans , for the first IL Massimo and when they opened their new location at Legacy Place in Dedham . Today the Group runs Pane E Vino Ristorante ( also on Federal Hill ), two IL Massimo locations and the Crow ’ s Nest in Warwick .
The 7 ( a ) details Size : Up to $ 5 million Purpose : Business expansion and working capital Use : Short- and long-term working capital . Can also be used to refinance existing
SPECIAL PROMOTION
business debt ; purchase equipment , machinery , furniture , fixtures , supplies , or materials ; establish a new business or assist in the acquisition , operation or expansion of an existing business ; or to build / renovate a facility .
A good financing option for all small businesses , whether brand new or mature , 7 ( a ) loans are disbursed through a network of SBA-approved lending institutions . You can find RI ’ s active SBA lender list on page 102 . Though the maximum amount for a 7 ( a ) loan is $ 5 million , they are often much smaller . Eligibility factors include industry , credit history and location . SBA Express Lines of Credit are also part of the 7 ( a ) program , offering lower borrowing maximums and faster funding times than standard 7 ( a ) loans .
“ If you ’ re in the business of securing credit for a business you need to talk to an SBA lender , they ’ ll help you through whole process ,” Hayward says . “ But don ’ t just go to the branch manager , make sure you ’ re talking to someone who understands SBA lending . One thing I advise is if you ’ re going into business , you need a business loan . Don ’ t use a
SMALL BUSINESS STATISTICS
According to the SBA ’ s 2022 RI Small Business Profile , there are 108,360 small businesses ( firms employing fewer than 500 ) in Rhode Island , comprising 98.9 percent of all RI businesses .
They employ 227,699 people , or 51.2 percent of all RI employees .
In 2022 , 40.7 percent of small business owners were women , 8.9 percent were from a racial minority , and 6.3 percent were veterans . The biggest small industries in Rhode Island are hospitality and retail .
home equity loan for business ; it could be the ultimate prescription for disaster .” The RI District Office completed 97 7 ( a ) loans with a value of $ 38 million in the first six months of this fiscal year , invested directly into Rhode Island businesses .
Hayward says small businesses are often launched in response to seeing a need in the community , such as Ripples Swim School . The owners saw a lack of quality swim lessons focused on children and dreamed of opening their own swim school . The SBA helped Ripples with a 504 loan to purchase land and buildings , and later a 7 ( a ) loan . They now offer facilities and swim lessons designed around the specific needs of young children and their families in Bristol and West Warwick .
504 : Long-term financing for major fixed assets What if you want to expand your company , but you need to purchase major equipment , land or buildings ? You could rely on an SBA 504 loan as J . Goodison Company , Inc . did , Hayward says . A veteran-owned marine services business with a small repair facility in Quonset , they wanted to expand and build a larger ship repair facility at the end of the dock . Co-owner Jack Goodison took advantage of a 504 loan to purchase a mobile ship hoist that could lift large commercial vessels , tugboats , fishing boats and ferries
96 RHODE ISLAND MONTHLY l APRIL JUNE 2023