Puerto Rico boosts small business financing with federal support
To continue promoting the State Small Business Credit Initiative (SSBCI) financing, the Puerto Rico Economic Development Bank (EDB), alongside the U.S. Department of the Treasury and the Federal Deposit Insurance Corp. (FDIC), recently convened representatives from key commercial banks and local cooperatives.
Alexis Luna from the FDIC noted that the U.S. Treasury recognized the EDB’s efforts with the SSBCI in a December report, where Puerto Rico ranks 31st among 62 U.S. jurisdictions in fund utilization.
“For this reason, we continue to analyze and approve financing under this initiative, to continue promoting the economic development of the island,” said EDB President Luis Alemañy. “We urge entrepreneurs to approach their banks and cooperatives and inquire about these programs with the EDB.”
Ronald Kelly and Samantha Asker from the U.S. Treasury were also present at the event and addressed questions to further assist entrepreneurs in Puerto Rico.
“We are constantly seeking different and innovative ways to continue supporting the development of new entrepreneurs and existing businesses with interest rates between 4% and 8%,” Alemañy highlighted. “With the multimillion-dollar allocation from the federal Treasury, we will help the economic development of our island and the creation and retention of direct and indirect jobs.”
An SSBCI initiative known in Puerto Rico as “Boost Your Business” offers local entrepreneurs two credit programs for financing in conjunction with a local bank or cooperative: participation loans and collateral support.
“The goal of ‘Boost Your Business’ is to provide access to capital to small businesses, low-to-moderate-income individuals’ businesses or disadvantaged communities,” said Samuel Carlo, the EDB’s chief financial officer and SSBCI program project manager. “In the Loan Participation Program, the EDB can cover up to 50% of an eligible transaction with a local bank or cooperative. In the case of collateral support, the EDB provides up to 50% cash collateral … which ensures loan repayment.”
These programs support the acquisition of various assets, including real estate, equipment and business improvements. Additionally, the EDB plans to introduce a venture capital investment program for entrepreneurs not yet eligible for financing.
“Boost Your Business” has already aided more than 25 local businesses in the tourism, manufacturing, service and agricultural sectors.
“The EDB works with banks and cooperatives to stimulate access to financing for small entrepreneurs. We have held meetings with commercial banks and visited a large number of cooperatives to present them with the details of ‘Boost Your Business,’” said Vivian Dolagaray, EDB executive vice president of Commercial Strategy and Financing. “Specific questions have arisen in all meetings from each bank or cooperative, and we know that the information provided is of great value to their current and future clients.”
The recent meeting also showcased SSBCI financing examples from other U.S. jurisdictions and included third-sector representatives supporting business creation.
“At the EDB, we continue to keep our doors open to guide and advise commercial banks and cooperatives on credit needs with support in collateral deficiencies or participation loans with their small and medium-sized business clients.”
