Rhode Island's Business Development Incubator Sees Success with Help from Coastway CU
PROVIDENCE, R.I. - The Business Development Co. of Rhode Island is seeing success thanks to partnerships with Coastway Credit Union and other lenders. BDC's specialty is lending money to businesses that have been turned down by banks. The $231 million Coastway CU, along with Bank of America, Bank Rhode Island and Citizens Bank are a few of the lenders that have helped the BDC help small business owners. Coastway is the only credit union that has partnered with the BDC. The loans actually equip them with enough capital to be eligible for traditional bank loans, according to the BDC. Because the loans are unsecured by capital, secured lenders are paid first should a business experience financial difficulties. Loans of up to $2 million are available and interest rates tend to be higher, between 10.5% to 14%. Chartered in 1953 to help grow Rhode Island's economy, the BDC is regulated by the Rhode Island Department of Business Regulation. It has since expanded its charter to lend to businesses in Massachusetts and Connecticut and has increased its lending capital to nearly $9.5 million. It also has a $900,000 reserve to pay back its member financial lenders banks should a business defaults on a loan. Loans of up to $2 million are available. Nearly all of the businesses Coastway and other member lenders refer to the BDC are those that they can't take a risk on, the BDC said. Some types of loans carry a SBA guarantee. Each year, the BDC lends to 10 to 15 businesses.