RIEDC Board Approves Governor Chafee’s Changes to Job Creation Guaranty Program
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April 26, 2011 | Print this page | Share This |
Other measures approved aimed at expanding community-based YMCA programs and strengthening the state’s Green Economy
The Rhode Island Economic Development Corporation (RIEDC) Board of Directors today approved new rules and regulations for the state’s Job Creation Guaranty Program that will provide greater access to capital and credit for small businesses in the state. The RIEDC Board also approved financing measures for two projects aimed at expanding community YMCA programs and growing Rhode Island’s Green Economy.
“Small businesses are the backbone of our state’s economy, and providing them with easier access to working capital is critical to the strengthening of our economy the creation of new jobs for Rhode Islanders” stated Governor Lincoln D. Chafee. “I commend the RIEDC Board for its decision on the rules and regulations for the Job Creation Guaranty Program and for their attention to renewable energy and community-based programs,” he continued.
“The small business community has made it clear that difficulty in obtaining working and growth capital continues to be a significant obstacle to their success. By modifying the Job Creation Guaranty Program to enhance SBA loan guarantees, we can strengthen the program’s effectiveness and make it possible for private lenders to provide greater access to financing for small businesses,” RIEDC Executive Director Keith Stokes said.
Job Creation Guaranty Program
The RIEDC Board took a significant step to help Rhode Island small businesses gain greater access to capital by approving new rules and regulations governing the state’s Job Creation Guaranty Program. The Board adopted a provision in the rules, proposed by Governor Chafee in March, which will build on the success of U.S. Small Business Administration (SBA) lending programs by placing additional loan guarantees on SBA 7(a) loans using the Job Creation Guaranty Program.
The RIEDC will set aside up to $5 million of loan guarantees from the program to bring the current 75 percent guarantee up to 90 percent for SBA 7(a) loans in Rhode Island. The additional guarantee will provide further incentive to financial institutions to make small business loans backed by the SBA and the Job Creation Guaranty Program.
The RIEDC Board also capped the maximum amount of loan guarantees for the Job Creation Guaranty Program at $10 million for any single project other than SBA 7(a) loans. The cap will ensure that more companies looking to expand or relocate in Rhode Island can take advantage of available loan guarantees.
Solar Canopy
In an effort to promote clean energy development, the RIEDC Board awarded a $120,000 recoverable grant through the state’s Renewable Energy Fund (REF) to Solar Canopy, a design and development company looking to create the first generation of rapidly deployable, multifunction solar parking lot canopies. The company is seeking to develop the first eight-car modular canopy prototype made of lightweight composites, with optional capabilities for car-charging and separate rainwater and runoff water capture for use at urban and suburban parking lots. The company will repay the grant based on royalties on all future sales when the Solar Canopy product is brought to market.
The concept was originally conceived in 2007 for the Trinity Academy for the Performing Arts in Providence, RI. The goal was to create a visually pleasing design that maximized air rights and unimpeded solar access in the parking lot to develop a renewable energy generation and water conservation model to help make the school sustainable. The REF funded an initial feasibility study which has resulted in the establishment of Solar Canopy as a new spin-off business.
YMCA of Pawtucket
The RIEDC Board gave preliminary approval for the issuance of up to $5 million in tax-exempt bonds to help finance the construction of a new year-round, indoor facility at the YMCA of Pawtucket’s (YMCA) MacColl field site in Lincoln, RI. The approval will allow project expenditures from this point forward to be eligible for bond financing which is subject to a number of additional factors, including a final commitment from a private lender to purchase the bonds and final approval by the RIEDC Board to issue the bonds. The RIEDC would only serve as a conduit in the transaction. All credit risk would be assumed by the bond purchaser.
The $12.7 million MacColl YMCA project is expected to support approximately 111 construction jobs and result in the creation of 22 full-time and 64 part-time jobs within three years of completion.
The YMCA is engaged in an extensive, long-term building and renovation campaign to benefit the many communities it serves in northern Rhode Island. The centerpiece of the project is the construction of the 51,800 square-foot facility at the MacColl YMCA. The new building will become the cornerstone of a campus that offers multiple community-based programs, including a youth after-school program, teen rock climbing center, indoor swimming pool, gym and fitness center.