RISING JOB LAYOFFS, skyrocketing oil costs, declining house prices, consumer credit crunch, Rhode Islanders’ confidence in the economy to its lowest point in five years: These are in the headlines we see every day in the newspaper and hear nightly on the news. In spite of all the hoopla of years of woe, however, there is some good news in the economy. If reported, it would read like this: “Rhode Island Banks Ready and Willing to Lend to Local Businesses.”

At a recent meeting hosted by Governor Carcieri, U.S. Small Business Administration (SBA) Director Steve Preston addressed a group of local bankers. Mr. Preston is traveling around the country to some 150 locations to meet with local business leaders. At his meeting in Rhode Island recently he asked questions about the economy, access to capital and the overall health of our small-business community.

The response he received in Rhode Island was almost unanimous. Banks are lending to well-run businesses, there is no shortage of capital in the Ocean State market, and the competition for those customers is intense. In other words, Rhode Island banks are serious about lending money to businesses large and small.

The psychological effects of the headlines that I referred to earlier have had a serious impact on our economy. The news of the economy has discouraged many Rhode Island business owners who now believe that credit has dried up and there is no reason to even apply for a loan.

The Journal has reported on the decline of SBA-backed loans in the past three years. This lack of lending can be attributed more to a lack of demand than anything else. There are several potential reasons for this decline in loan applications — a rise in small-business profitability; a decrease in the confidence of business owners or the recent cutting of the Rhode Island tax credit for SBA fees. All of these may have contributed to the decline in loan applications, but for those responsible business owners who need capital, bank and SBA doors are wide open.

Although some of the headlines have revealed serious problems with consumer credit because of the handling of subprime mortgages, access to commercial credit has remained mostly unchanged. Rhode Island banks, by placing a special emphasis on our adherence to prudent lending standards, and our ability to forge strong relationships with clients, have seen a growth in commercial lending, even in the face of decreased consumer and business-owner confidence.

For years, local banks and the SBA have provided opportunities to small-business owners in need of capital, and today, our mission stays the same. We are optimistic about the local economy and believe that, together, local banks and business owners can make Rhode Island a beacon of growth that shines across the Northeast.

Merrill Sherman is president and chief executive of Bank Rhode Island.