Mike Chak puts a sheet of material on the new Strippit machine at Renova — bought with money from a lower-rate bank loan.

The Providence Journal / Kathy Borchers

Ricardo Crawford works on one of the new machines at Renova — bought with a special bank loan linked to job creation at the company. The bank program has created an estimated 300 jobs in the state in the last two years.

Providence Journal / Kathy Borchers

When Michael Chak moved to Rhode Island last spring to be with his pregnant girlfriend in Providence he needed to find a job — fast.

Originally from Connecticut, the 19-year-old Chak had a high school diploma and was without much work experience. He signed up to do temp work with RI Temps and, he said, hoped for the best.

“I came here not knowing anybody and not knowing where to find a job,” Chak said. “My parents were helping me a bit, but I was stressed out beyond belief.”

Four months later, Chak is hard at work as a machine operator at Renova Lighting Systems, a company that manufactures specialty, energy-efficient lighting. He got the job only a week and a half after getting to the state and hopes to hold on to the job for some time. For $10.50 per hour, 40 hours per week, along with what he described as good benefits, Chak operates Renova’s Turret press, a machine that arrived at the same time he did as part of the company’s recent expansion. The machine punches holes in pre-painted steel sheets that will later be formed into lighting fixtures. Chak alters the turret machine’s command to punch holes to the specifications demanded by the shop’s current production needs.

The job, which involves both physical and mental effort, is one Chak said he really enjoys. “I don’t mind waking up in the morning to come to this job,” he said. “The job really saved my butt.”

Chak has certainly had good fortune to find a full-time manufacturing job with a company that provides health-care benefits in this state which has seen a steady migration of such jobs overseas. His success is not solely due to Renova, owners Dave Nadeau and Rick Edwards said. The company, which added 4 employees to its former staff of 20, said much of that job creation is thanks to the Job Bank program at Citizens Bank, which provides loans at below the prime interest rate to companies that create full-time jobs in New England.

Renova was able to borrow about $300,000 for new equipment and construction of more space, for less than it would have paid at most other banks.

“The way the bank stepped in and helped us,” Nadeau said, “allowed us to buy the equipment and get it in place and leave us with enough cash left over to create jobs after the fact.”

Citizens began its Job Bank program in the mid-Atlantic states in 2004 and spread the program to New England in the beginning of 2005. During its first year, the program resulted in 126 million loans totaling $147 million and created about 3,500 new jobs, according to Citizens. In 2006, the bank said it plans to loan up to $150 million in low-interest loans in the hopes of creating another 3,750 jobs in the New England states.

To qualify for the low-rate loans, employers must create a minimum of one job for every $40,000 borrowed, with a minimum loan size of $240,000 and a maximum loan of $10 million. The prime interest rate is the interest rate charged by banks to their most creditworthy customers, and the below prime rate number that Citizens offers through the program is adjusted as interest rates change.

Ocean State Central Processing Location Inc., which runs the recently opened bakery for most of the Dunkin’ Donuts franchises in Rhode Island and Southeastern Massachusetts, decided to build its new baking facility in East Providence last year, partly because of the Job Bank program. John Justo, the head of the Dunkin’ Donuts franchise partnership, said it was the company’s relationship with Citizens and the existence of the program that made the franchisers look to Rhode Island, instead of Massachusetts, to build their bakery. The decision led to the creation, Justo said, of 122 Rhode Island jobs.

“Job creation stimulates the economy, and it employs people who were perhaps not working, which is good for the economy,” Joseph J. MarcAurele, president and chief executive officer of Citizens Bank of Rhode Island, said, explaining why the bank decided to implement the program. “Tying the loan back to a job guarantees that one position is going to be created for every $40,000, and that’s helping our business customers grow as well as creating opportunities for Rhode Islanders.”

Overseeing the program and making sure that those who receive the loans follow through and create the required number of jobs, is the Rhode Island Economic Development Corporation. Earl Queenan, director of finance for the corporation, said the program is particularly helpful for small businesses. Queenan estimated that more than 300 Rhode Island jobs had been created by the program over the last two years.

“"Having access to interest rates at, or below, the prime rate is extremely important, particularly to the small business community," Queenan said. "In the case of small businesses, every penny counts, and the ability to create savings through a loan program often translates into those same companies investing in training, research and development, new equipment, and above all new employees.”