Projo 7 to 7 News Blog

The state's top economic development official, J. Michael Saul, has called on lawmakers to pass legislation that would make it easier for small businesses to borrow money.

Saul, acting executive director of the state Economic Development Corporation, said the loan guarantees are a "crucial component" of Governor Carcieri's proposed $200 million small business stimulus bill.

The U.S. Small Business Administration offers a program guaranteeing between 40 percent and 75 percent of bank loans to small businesses. Under Carcieri's plan, the state would also guarantee a portion of bank loans, allowing banks to loan money confident that at least 90 percent of the loan would be repaid if the business defaults.

The plan, a key priority of the SBA, has run into opposition at the State House. "We have our own debt issues that we're concerned about, and quite frankly, there's a lot of sensitivity about bailouts right now," House Finance Committee Chairman Steven M. Costantino said at a recent hearing. "Without tremendous safeguards and performance standards of increased jobs, state taxpayers should not be on the hook."

For more information on Carcieri's stimulus plan and the criticism it has faced on Smith Hill, read Providence Journal stories by Steve Peoples and Neil Downing here and here, and an EDC description of the legislation here.

For breaking Business news, see the Biz blog.

Providence Journal archive photo of Rep. Costantino by Bob Thayer.

 Tags  Carcieri Economic Development Corporation economic stimulus economy politics

Comments

Iconic photo of RI politics said:

Great photo, Bob Thayer. ProJo should hold a caption contest for that one!!

Link | January 28, 2009 12:45 PM
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