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Small Business Loans in Rhode Island (2021 Update)
While there aren’t many small businesses in Rhode Island, it’s still a progressive state with a lot of full-time working individuals switching to entrepreneurship. There are a little less than 100,000 small businesses within the state offering an array of services for residents and tourists. It’s not uncommon for a business owner to need a loan at some point in their career. Business loans offer quick lump sums of cash to those who need it, allowing them to put it back into their companies.
Taking Out a Loan
Taking out a business loan could take several months and you’ll need a clear goal for where the funds will be used. Business owners need to make a plan for their money and use it only for business-related expenditures. The last thing you want is to get locked into a loan contract and blow the money on something that doesn’t benefit your company. It’s not uncommon for businesses to use their loans to essentially bail themselves out. Struggling companies often need a saving grace to pull them back up out of the hole they’ve created. The saving grace in this case would be the small business loan.
How to Apply for a Loan
For Rhode Island entrepreneurs, you’ll need a reputable bank offering business loans. Business loans are different from personal loans because the equity is tied into the company’s assets. If your business should go under and fail, you won’t be responsible for paying back a small business loan. Personal loans, on the other hand, are tied into the person’s collateral and if your business fails, you’ll be responsible for paying back everything you received or risk having collateral taken away.
During the loan application process, the bank is going to need information regarding your company, assets, future plans and losses that might have been sustained. Generally, the lender wants to know they’re giving out a loan to a prospective business owner who has a high chance of succeeding. High-risk and struggling companies may be denied their loans due to the liability that they create for the bank. Newly-established businesses may find it difficult to obtain a loan, too, since banks see newer companies as being high-risk until they are fully realized.
Interest Rates and Repayment
Interest rates on Rhode Island business loans can range from five to nine percent. The higher the interest rate, the more difficult it will be for you to pay back the loan in an affordable manner. Unfortunately, high-risk companies may only qualify for higher interest rates, so you’ll have to take what you can get in this case. Repayment of the loan is specific to your term length agreement, allowing you to have years to pay off the loan and use that money for the livelihood of your company.
Banks in Rhode Island That Offer Small Business Loans
Rated by the SBA as the top banks of the state for business loans are the following:
Coastway Community Bank
A community bank based in Warwick, Rhode Island, Coastway Community Bank provides personal, business, and mortgage banking products. It was founded in 1920 in the same place it is headquartered today.
BankNewport is a provides banking services to individuals and businesses all over Rhode Island. Founded in 1819, it is also one of the oldest financial institutions in the area.
Washington Trust Bancorp Inc.
Founded in 1800, Washington Trust Bancorp Inc. has a variety of commercial and personal banking services and products made available to people in the locale.
Bank Rhode Island
Under the leadership of Mr. Mark J. Meiklejohn, Bank Rhode Island has been providing stellar banking experience to people in Providence, Rhode Island since 1996. It has also loaned small businesses a $205 million in just one year.
Freedom National Bank
Freedom National Bank was established in 2001 in Greenville, Rhode Island. Aside from personal banking services, this bank has a wide array of business banking solutions which include loans and other lines of credit.
Home Loan Investment Bank FSB
Home Loan Investment Bank FSB first opened its doors to the public in 1959. After decades in the industry, it has brought $59 million to small businesses in the form of loans.
Top Cities in Rhode Island and Their Lenders
Rhode Island is the smallest state in terms of land mass in the United States. It’s a beautiful Northeastern region that has a number of colonial settlements and historical landmarks. Because Rhode Island is so small, the state is extremely densely populated. If you’re looking to start a business in the region, you’ll want to make sure that you move to one of Rhode Island’s major cities – here you will find all the infrastructure you need to create a successful small business. The state’s economy used to be based around fishing and construction. But modern shifts in economic forces have turned Rhode Island into a hotspot for services and education.
Below we’ll take a look at Rhode Island’s top cities to help you better understand where you should move if you want to start a new business. We’ll also provide you with a list of the top lenders in each city!
Providence, Rhode Island
Providence is by far the largest city in the state of Rhode Island. It’s a great place to start a new business, but the cost of living can be quite high. If you want to work in the healthcare sector, this is one of the top spots in the region. There are also plenty of other industries thriving in the city. The top lenders in the city of Providence are listed below – they’re the friendliest small business lenders in the state:
BayCoast Bank is our top pick for the Providence region. It’s the best bank for those who want access to a large lender with local experience. They have the funding ability to get you the cash you need to succeed. They also have great business banking services, which can help you keep all your business’s finances in one location.
The Business Development Company
The Business Development Company is a small lender that provides small loans to business owners in the Northeast. They’re dedicated to ensuring that business owners who may find it hard to qualify for finance can get their hands on the funding they need. They have tons of local experience helping business owners achieve their goals.
Warwick, Rhode Island
Warwick is the second largest city in the state of Rhode Island. It also has a diverse economy with a range of different large businesses having a presence in the area. The city is also well-known for its retail sector. If you’re looking for a great place to set up a retail business, this may be the place to go! Below are our favorite lenders in the area:
The Business Development Company
As mentioned previously, the Business Development Company is a great lender that provides small loans to small business owners throughout the Northeast. They’re passionate about helping their clients achieve business success – they’re a great partner to have. If you want affordable financing, this should be your first stop. But remember, they only do small loans.
Independence Bank is a large, regional lender with plenty of influence in the local Warwick economy. This lender is great at helping small business owners obtain the financial successes they’re looking for. If you want the strength of a large financial institution, Independence Bank is a good option. It’s also a great option for those who want traditional business banking services on top of their lending.
Cranston, Rhode Island
Cranston is a small city in Rhode Island, but it still has all you need to create a successful business. A large, regional bank is even headquartered in the area. You’ll find that the economy is diverse with a number of different companies operating in the area. But there is also a large retail presence, as with Warwick. Our favorite lender in the Cranston area is listed below:
Coastway Community Bank
Coastway Community Bank is the bank headquartered in Cranston that was mentioned above. They provide loans to small business owners throughout the state, but they have a particular focus on their hometown of Cranston. They have a deep understanding of the local economy and how to help business owners in the area achieve success. They also provide local business banking services for those who need them!
Pawtucket, Rhode Island
Pawtucket is famous for being the home of Hasbro – the world’s largest board game manufacturing company. The city also has a number of other smaller businesses in the area, and it’s much more affordable than Providence or some of the other major areas in Rhode Island. Our favorite lender in the Pawtucket area is listed below:
Pawtucket Credit Union
Despite being a small city, Pawtucket has its own credit union – the Pawtucket Credit Union. This financial services union provides great rates to their members. They’re the perfect partner if you want affordable lending and local experience. If you want to work with a loan company that can also provide you with banking services for your business, Pawtucket Credit Union is a great option.
Remember, some of these companies or banks are very specialized and may only handle SBA business loans or a business line of credit. Ask them about any special programs for minorities or women. Also ask for information about business grants for startups if that interest you. If you bad credit don’t worry as there still may be other alternative lenders willing to work with you.