Treasurer Magaziner's BankLOCAL initiative, which incentivizes banks and credit unions to make loans to small businesses in Rhode Island, has expanded its reach by welcoming two new banks, BankNewport and Freedom National Bank.
"Small businesses are essential to Rhode Island's economy. Too many entrepreneurs and small business owners have difficulty getting loans to expand their businesses and hire more people," said Treasurer Magaziner. "With the BankLOCAL program, we are moving millions of dollars to community banks and credit unions when they make loans to small businesses in Rhode Island."
Treasurer Magaziner's BankLOCAL initiative moves the State's cash -which has historically been deposited in big national and international banks- back home to Rhode Island credit unions and local banks. Since the program launched in 2017, BankLOCAL has moved more than $26 million back to Rhode Island, supporting loans to more than 235 small businesses.
"Freedom National Bank is very excited to be a participant bank in the BankLOCAL deposit program through the Rhode Island Treasurer's Office. Treasurer Magaziner has been a small business advocate and the BankLOCAL program is a great tool for Freedom National Bank to gather deposits and reinvest by lending them back into the Rhode Island Small Business community," said Tony Botelho, President of Freedom National Bank.
When a participating bank or credit union makes a $100,000 loan to a small business in Rhode Island, the State will make a $100,000 deposit into that bank or credit union. The State has no role in selecting or approving small business borrowers. Lending decisions are made by the participating banks and credit unions.
"Joining General Treasurer Magaziner's office in the BankLOCAL community deposit program is truly an honor for BankNewport," said Leland R. Merrill, BankNewport Executive Vice President and Chief Operating Officer. "Being able to help small businesses expand, create jobs, and thrive has always been our commitment as a Rhode Island community bank. For this reason, we're excited by the Treasury's shared focus in support of local financial institutions like BankNewport and our efforts to improve and promote economic growth of small businesses and our communities."
BankLOCAL offers a 2-to-1 match for loans made to first-time business owners, women and minority-owned, and veteran-owned small businesses in Rhode Island. Nearly 30 percent of current loans in BankLOCAL were made to a business which qualifies for this 2-to-1 match.
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