Monday, April 13, 2020
GoLocalProv Business Team
John Rogers, Executive Vice President of Goldman Sachs, announced on Monday that his investment bank has pledged $10 million to back loans for the federal Paycheck Protection Program (PPP).
Rhode Island Governor Gina Raimondo, Rhode Island Commerce Secretary Stefan Pryor, U.S. Senator Jack Reed, and U.S. Congressman David Cicilline joined in the announcement.
On Thursday, the NewYork Times reported “The disaster loan program’s missteps have been overshadowed by the chaotic start of the federal government’s other large small-business aid effort, the Paycheck Protection Program, which started taking applications last week. Applicants to that initiative have faced delays as banks deal with the hasty deployment of a $349 billion program.”
Others in Rhode Island’s restaurant industry have criticized the federal PPP program. As GoLocal reported, restaurant owners have complained that the structure is flawed.
Jose Castellanos, founder of Rhody Tees, said that he has already received a bridge loan from Rhode Island Commerce and that has allowed him to stay in business. That funding is from a separate loan program created by the state and funded in part by BankNewport.
The primary sources of funding during COVID-19 are the U.S. Small Business Administration Economic Injury Disaster Loans and the PPP.
The loan amount via Goldman is capped at $250,000 — however, the $10 million commitment will not come close to meeting the amount of demand in Rhode Island.
“I want to thank Goldman Sachs for making this incredible commitment to Rhode Island,” said Raimondo. “The decisions we’ve had to make to keep Rhode Islanders safe through this crisis have had an overwhelming impact on our economy, particularly our small businesses. It’s urgent that we offer swift solutions that bring needed resources to our small businesses. I hope this announcement provides additional relief to our dedicated small business owners.”
“Within Rhode Island’s economy, the Coronavirus crisis has hit small businesses the hardest,” added Pryor. “This partnership will enable us to provide additional resources to our state’s small businesses at a crucial time. We are very grateful to Governor Raimondo and Goldman Sachs for bringing this program to Rhode Island, and we thank CRF for collaborating with us to implement the initiative.”
This option is for small businesses and non-profits who have been unable to submit a PPP application through another lending institution. Loans will be made through Community Reinvestment Fund (“CRF”), the largest non-profit, non-bank SBA 7(a) lender in the country, pursuant to the Paycheck Protection Program (“PPP”) under the CARES Act. This program provides urgent cash flow assistance to small businesses that have been negatively impacted by COVID-19. These loans can be partially or wholly forgiven for businesses that maintain or rehire their workforce and can be used for:
• Payroll costs;
• Interest on mortgages;
• Rent; and,