Francis and Lily Jamiel stand inside Jamiel’s Shoe World, on Main Street in Warren. The Small Business Administration gave out its first loan under the stimulus package, $400,000, to save the longtime Rhode Island store.

The Providence Journal / Frieda Squires

WARREN — Decades of being a small-business owner did not seem to be worth much to Francis Jamiel a couple of months ago when he was wrestling with the possibility that he might have to be the one to close the family shoe store after a 72-year run.

Started by his father, Joseph, Jamiel’s Shoe World had become a Rhode Island institution and a destination on the town’s Main Street as generations of parents brought toddlers there for their first fittings and running aficionados made the trek to make sure they were outfitted with just the right sneakers.

Then the economy faltered and the family had to close a second store they had opened about eight years ago in Warwick. Francis Jamiel said the plan was to try to regroup from their home base in Warren, but it wasn’t looking good.

As winter passed, he said, he found himself struggling to repay some older business loans and keep new inventory in the store.

He decided to borrow some more money to get through the rough times, he said, but was shocked to find that the family’s good name and business history in Rhode Island didn’t get him anywhere with banks that were clamping down on their lending practices as national financial institutions failed.

One of the lowest points came about a month ago when Jamiel, whose search for a loan had led to rejection from nearly 10 banks, found himself washing the store’s front windows and helping stock the shelves with no financial salvation in sight. “I kept thinking, ‘Is this it?’ ” he recalled Monday. “Am I going to have to be the one to close this business after all these years?”

A friend suggested he try one more bank, the Cranston-based Coastway Credit Union, and Jamiel said that’s where the story turned around.

Coastway was not only interested in granting a business loan, it also hooked him up with the Rhode Island office of the U.S. Small Business Administration which, under the federal stimulus plan, has more tools than ever right now to help the state’s small businesses.

Jamiel got a $400,000 loan from Coastway — a loan that is secured by a 90-percent guarantee from the SBA. The money will enable him to pay his business debts related to the closing of the Warwick store, beef up inventory and hopefully hire more employees.

It also makes Jamiel’s the first business in Rhode Island to be helped by the increased-guarantee loan program that the SBA is able to offer under the federal stimulus plan, formally known as the American Recovery and Reinvestment Act 2009.

On Monday, the governor, most of Rhode Island’s congressional delegation and other top-ranking state employees gathered at Jamiel’s to celebrate a slice of good economic news and to herald the store as an example of other recession-survival stories that can happen in this state through the cooperation of local banks and the SBA.

“What is Warren without Jamiel’s,” said Rep. Patrick J. Kennedy. “This is more than a small business … it’s the life of a community. Small businesses are the lifeblood of this country.”

“Jamiel’s is part of the Rhode Island business landscape,” said Lt. Gov. Elizabeth Roberts, a longtime supporter of “buy local” programs. “We need to show that the system can work for family businesses … because this is how we’re going to rebuild Rhode Island’s economy.”

Governor Carcieri said it is important that the state continue some of the support –– such as the money to cover borrowing fees — when the federal program sunsets in December.

For Jamiel, Monday was emotional event and he became choked up as he looked at the nearly 100 officials, friends, family members and employees who crowded the store to cheer that he is not going out of business. “We’re going to make it,” he said.

Jamiel gave most of the credit to Coastway with its track record of helping Rhode Island businesses.

But Bill White, president and chief executive officer of Coastway, said the government-backed loan to Jamiel’s was almost a no-brainer. “We’re in the banking business, but it’s still about people,” White said. “If we can’t take a risk on people who are as heavily invested in the community as the Jamiels are, then there’s something seriously wrong.”

Like other guests, including Carcieri, White did not leave without buying a pair of shoes.

Was he trying to guarantee that the Coastway loan gets repaid?

No, not at all, White said. “Everyone in my family knows I can’t leave a shoe store without shopping,” he said.

bpoliche@projo.com