Rhode Island Capital Access Program
Guarantees that Help Banks write More Small Business Loans
With the new Rhode Island Capital Access Program, Rhode Island becomes the 27th state to adopt this valuable credit enhancement program. CAP is designed as a tool for banks and credit unions to attract new small business customers by lending to small businesses that may not meet conventional underwriting standards. It does so by establishing a unique Cash Collateral Account in your financial institution. This account allows lenders to recover losses on defaulted loans that are enrolled in the Capital Access Program.
Loans guaranteed through this program may be used to start or expand businesses, or to provide permanent working capital to ensure continued profitable operations. Typical uses are equipment purchases, start-up costs and real estate acquisitions. The CAP program can also be used for working capital lines of credit.
Borrowers Gain Ready Access to Capital
Because the Capital Access Program is for loans that are not bankable on their own, borrowing companies gain access to financing where none existed – up to $750,000 – with no minimum amount required. These loans are readily available at participating financial throughout Rhode Island. With few exceptions, virtually any type of commercial loan qualifies under the program if it is legal in Rhode Island.
Banks Improve their Loan Flexibility
It costs nothing to involve the Capital Access Program in a small business loan. On the contrary, participating institutions generally experience significant growth in their small business portfolios and gain Community Reinvestment Act credit for these loans. There are no unnecessary delays or red tape, since lenders use their own forms, underwriting standards and closing procedures.
Everything Stays Between the Borrower and the Lender
When a borrower applies to a participating lender for a commercial loan, the lender will determine if the loan requires credit enhancement. The lender negotiates all loan terms with the borrower directly, including pricing and the level of guaranty premiums required. It is the lender that commits and funds the loan, following its own procedures with its own timeframe. After closing, the lender notifies BDC Capital, which provides the lender with matching premiums.
Massachusetts Capital Access Program (CAP)
BDC Capital also offers the Capital Access Program in Massachusetts. BDC Capital has helped over 5,800 small business borrowers since 1993 and over 80 banks have benefited from participating in the CAP Program. The maximum loan size is $5,000,000 with no minimum. Eligible businesses must have 500 or fewer employees.
For more information on the Massachusetts Capital Access Program please click here.
Goldman Sachs 10,000 Small Businesses
Goldman Sachs 10,000 Small Businesses is a public-private partnership designed to unlock the growth and job-creation potential of small business owners. Led by co-chairs Lloyd Blankfein, Warren Buffett, Michael R. Bloomberg and Dr. Michael Porter, the program provides businesses with practical education, business support services, and access to capital since its inception in 2009. Rhode Island represents the first time that Goldman Sachs has committed to a state-wide initiative to deliver this innovative program.
Goldman Sachs has selected BDC Capital as it’s first-ever, state-wide partner to deliver the financing component of this program to Rhode Island based small businesses. BDC Capital is the oldest business development company in the United States and has financed more than 6,000 New England businesses since its inception in 1953.
To apply for financing under this program, a business must meet the following minimum criteria:
1. In business more than 2 years.
2. Minimum annual revenues of $100,000.
3. At least two employees.
Loans range from $50,000 to $500,000 and can be for any legitimate business purpose. Loans can also be made in conjunction with loans from banks, credit unions, or other financing sources.
Note: The Goldman Sachs 10,000 Small Businesses program also includes a free education program through Community College of Rhode Island. You do NOT need to complete this program to be eligible for a loan.
For more information contact:
Carol Cedrone Brennan, Director of Business Development
BDC Capital – Financing Solutions
30 Exchange Terrace, 4th Floor, Providence, RI 02903