When the Business Development Company of Rhode Island was established by legislative charter as a non-bank lender in 1953, it aimed to be a source of supplemental financing that would allow established as well as emerging companies to participate more fully in the nation's postwar prosperity. It turned out to be an idea whose time was right—and which is still right today.

Since its birth, the BDCRI has played an instrumental role in helping hundreds of companies become strong competitors. At the same time, it has helped put thousands of Rhode Islanders to work.

Clients today range from manufacturing, service, and jewelry companies, traditional mainstays of Rhode Island industry, to software, biotech, and other high-tech companies that will be part of its future.

The BDCRI, under the leadership of Chairman, Stephen P. Higginbotham, Vice Chairman, Douglas E. Scala and President, Peter C. Dorsey, Jr., helps companies in a variety of ways. It works closely with its member financial institutions and other senior lenders to provide gap funding in the form of subordinated or junior debt and, in some instances, equity. It also provides direct funding to companies not presently bankable but with the potential to become bankable. BDCRI financing is most often used for working capital, product development, purchase of fixed assets, and acquisition of existing businesses. The BDCRI provides funding to companies in Rhode Island and nearby Massachusetts and Connecticut.

The BDCRI is a non-bank Small Business Administration lender and sometimes uses the SBA guarantee program to enhance its loans. In some instances the BDCRI makes equity investments, which allow client companies to strengthen their capital base without increasing their debt burden. Many applicants also benefit from the business counseling they receive as part of the BDCRI application and review process.

In all instances, the ultimate goal of BDCRI financing is to help established companies grow stronger while helping to retain and create jobs. Doing so benefits everyone involved. Borrowers obtain the capital they need to fuel growth. Workers gain because growing companies create new jobs. The local economy strengthens as greater employment increases tax revenues. Senior lenders achieve their goal of underwriting more loans. And the BDCRI gets to help more companies as its loans are repaid. It’s what some would call a win-win-win-win-win situation.

The BDCRI's original shareholders were individuals, as well as companies and institutions. In 1986, the company was recapitalized, with the largest shareholder, Textron Inc., contributing its shares to the Greater Providence Chamber Foundation. The Greater Providence Chamber of Commerce also put in $1 million. Then, in 1995 and subsequently, the BDCRI raised almost $6.5 million in new capital from its member financial institutions, who today are its major shareholders. While the BDCRI pays no dividends and its stock is not traded, shareholders benefit from helping to strengthen the local economy.

In 2001, the BDCRI established the Rhode Island Business Plan Competition, underwriting the $50,000 top prize. Approximately 75 plans were submitted the first year. The 2002 competition featured a field of more than 80 competing business plans from seven states. Today, the BDCRI co-sponsors the competition with two dozen other supporters.

In 2004, the BDCRI helped establish the Cherrystone Angel Group, Rhode Island’s first organized angel investor group. In its first three years, the group invested more than $2 million in eight emerging companies.

The Business Development Company of Rhode Island changed its charter in 2005 to enable it to do business in nearby Connecticut and Massachusetts.