Rhode Island Treasurer Seth Magaziner announced on Aug. 16 that his BankLocal program has moved $15 million in state deposits to eight participating local banks and credit unions, in order to match loans to more than 150 qualifying businesses statewide.
BankLocal, which Magaziner launched in February, is a community deposit program that earmarks up to $30 million in state deposits to local banks and credit unions. The goal of the program is to support local financial institutions as they lend to small businesses in Rhode Island, thereby advancing economic growth and opportunity in the Ocean State.
Deposits into participating banks and credit unions will typically match the amount lent to qualified small businesses in Rhode Island with fewer than 100 employees. Loans to women- and minority-owned businesses are eligible for a 2-to-1 matching deposit into the lending bank or credit union—up to $250,000 per loan.
"I am committed to using the Treasurer's Office to encourage economic growth and job creation in Rhode Island," said Magaziner in his formal announcement. "Our BankLocal program is improving access to capital for Rhode Island small businesses by depositing cash at local banks and credit unions that are supporting Rhode Island entrepreneurs."
Jairo Echeverry, owner of Budare Grille in Central Falls, Rhode Island, is a small business owner who received a BankLocal-supported loan from Navigant Credit Union. "As a small business owner, working with Navigant has been a great experience. Their loan officer took the time to really understand my business needs," said Echeverry. "I am happy that the Treasurer's Office is working to provide financial support to small businesses through the BankLocal program."
"For over 100 years, Navigant has been delivering on our commitment to serve the communities where we operate," said the credit union’s CEO Gary Furtado. "The early success of this innovative program highlights the value of collaboration between government and the business community."
Participating financial institutions must meet minimum requirements for financial soundness, including proof of FDIC or NCUA insurance, and all state cash deposits must be fully collateralized.
No pension money is used for the BankLocal program and the Rhode Island Treasury has no role in selecting or approving small business borrowers. Lending decisions are made solely by participating banks and credit unions. Participating lenders include BankRI, Bristol County Savings Bank, Centreville Bank, Customer's Bank, Home Loan Investment Bank, Navigant Credit Union, People's Credit Union, and Washington Trust.