Small business credit initiative promoted at conference

Luis Alemañy, president of the Economic Development Bank for Puerto Rico

By The Star Staff

The Economic Development Bank for Puerto Rico (BDE by its Spanish initials), along with the U.S. Department of the Treasury and the Federal Deposit Insurance Corp. (FDIC), brought together representatives of the main commercial banks and local cooperatives in recent days with the purpose of continuing to promote financing under the State Small Business Credit Initiative (SSBCI).

Alexis Luna of the FDIC highlighted during his presentation that the federal Treasury recognized the effort of the BDE with the SSBCI initiative during the report it published in December 2023. The report indicated that, of the 62 jurisdictions in the United States, Puerto Rico ranks 31st in the highest amount of funds used.

“For this reason, we continue to analyze and approve financing under this initiative, to continue promoting the economic development of the island,” BDE President Luis Alemañy said in a written statement. “We urge entrepreneurs to approach their banks and cooperatives, and ask them about these programs with the BDE.”

“We are constantly looking for different and innovative ways to continue supporting the development of new entrepreneurs and strengthen existing businesses with financing between 4% and 8% interest rates,” Alemañy added. “With the multimillion-dollar allocation by the Federal Treasury, we will help the economic development of our island, and the creation and retention of direct and indirect jobs.”

The SSBCI initiative, known in Puerto Rico as “Impulso a tu Negocio,” offers local entrepreneurs two credit programs to finance with the support of a local bank or cooperative: participating loans and collateralized support.

“The goal of ‘Boost Your Business’ is to provide access to capital to small businesses, businesses owned by low- and moderate-income individuals, or disadvantaged communities,” noted Samuel Carlo, chief financial officer of the BDE, who also serves as project manager for the implementation of the SSBCI program on the island. “In the Loan Participation Program, the BDE can purchase up to 50% of an eligible transaction with a local bank or cooperative. In the case of collateral support, the BDE offers a cash collateral of up to 50% of the transaction, which guarantees the repayment of the term loan or line of credit for the contracted period.”

With the two programs under “Boost your Business,” local entrepreneurs will be able to finance the acquisition of real estate, equipment, inventory, working capital, costs of establishing a new business or improvements to existing businesses. Funds can be used to purchase any tangible or intangible asset, with the exception of capital gains.