Posted by: Providence Chamber of Commerce | October 4, 2011

State Leadership Announces $13.1M in Federal Funding for Small Business Growth

Governor Lincoln D. Chafee joined U.S. Senators Jack Reed and Sheldon Whitehouse and U.S. Representative David Cicilline, Pawtucket Mayor Donald Grebien and Rhode Island Economic Development Corporation (RIEDC) Executive Director Keith Stokes to announce that Rhode Island has been awarded $13.1 million in federal funds to help finance small businesses through the U.S. Treasury Department’s State Small Business Credit Initiative (SSBCI). The program was established by the Small Business Jobs Act of 2010 and will provide much needed new capital to Rhode Island small businesses and entrepreneurs to help them grow and create quality jobs in the state.

Rhode Island’s SSBCI funds will be invested in early-stage, technology- and innovation-driven companies that will create high-skilled, high-wage jobs and expand Rhode Island’s knowledge economy, small businesses in core urban communities to help revitalize traditionally underserved areas of the state. This new source of small business financing is also expected to spur additional private capital investment and complement other state capital and economic development programs aimed at further expanding key growth industries in the Ocean State.

“The success of small businesses – particularly in urban areas – is key to Rhode Island’s economic revitalization,” Governor Chafee said. “I am proud of the collaboration between the state and our federal partners that has led to this significant investment in Rhode Island’s small businesses and entrepreneurs.”

“Small businesses need capital to succeed.  Today, that’s often hard for them to find.  This $13.1 million in federal funding is going to support these small companies and entrepreneurs with up to $131 million in new private investment to help them preserve and create jobs for Rhode Islanders,” said Reed.

“Small businesses are the engine of our economy, and we must continue to give them the support they need to grow,” said Whitehouse. “These federal funds will leverage much needed capital to Rhode Island small businesses and help them to create quality jobs in our state.”

“Small businesses and startups will always be our main driver of growth, but they can’t create the jobs we need in Rhode Island unless they have a partner to invest in their ideas and expansion. This funding is particularly beneficial to our economy because it targets the industries that are in the highest demand through programs with track records of identifying which companies have the most potential.“

“This $13 million investment in Rhode Island’s small businesses can be put to immediate use – helping our small firms grow, create jobs, and advance our state’s economic recovery and ability to compete. These federal dollars in turn will leverage millions of additional dollars in private lending and capital – further supporting small businesses, the proven job creators and engines of our state’s economy,” said Congressman David Cicilline.

The $13.1 million will be directed to provide investment capital to small businesses in Rhode Island through the following programs:

  • $9 million to the Slater Technology Fund for seed stage investments. Slater provides seed funding for local technology-based ventures in the IT and life sciences industries.
  • $2 million to Betaspring for new small business formation. Betaspring is a mentorship-driven, Providence-based startup accelerator program for technology and design entrepreneurs.
  • $2.1 million to the RIEDC’s Small Business Loan Fund for additional capital, including funds for urban small business investment to help revitalize the state’s core urban communities and traditional commercial centers.

“Through interagency collaboration, led by Governor Chafee, and the support of our Congressional delegation, Rhode Island was able to secure these critical funds that will bolster our ability to capitalize on our talent base and better support small businesses and entrepreneurs who will create quality jobs in 21st century growth industries,” said RIEDC Executive Director Keith Stokes. “Through SSBCI investments in RIEDC’s Small Business Loan Fund, we will also be able to provide more direct financial resources to businesses in our state’s core urban communities. This new capital infusion will help renew those areas into vibrant and attractive mixed-use environments in which to work, live, visit and own a business.”   

In June, the RIEDC worked with the Governor’s office and Department of Administration (DOA) to complete and submit Rhode Island’s application for SSBCI funding.

DOA will receive the SSBCI funds from the U.S. Treasury Department and oversee the implementation of the state program. The RIEDC will be responsible for the day-to-day management and administration of the program.

The SSBCI has made $1.5 billion available to states to strengthen existing and new programs that support lending to small businesses and small manufacturers. Participating states will use SSBCI funds for programs that leverage private lending to help finance small businesses and manufacturers that are creditworthy, but are not able to access the loans they need to expand and create jobs.  The SSBCI is expected to help stimulate up to $15 billion in follow-on private lending to small businesses nationwide.

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