State program assists its 1,000th business
The state's Small Business Express Program, which has pumped more than $7 million into southeastern Connecticut's economy, reached a milestone over the past few weeks by helping fund its 1,000th company statewide.
Gov. Dannel P. Malloy and Catherine Smith, commissioner of the Department of Economic and Community Development, announced the milestone Monday while visiting Microboard Processing Inc. in Seymour, the thousandth company to get grant or loan assistance from the job-creation program. The program is available only to businesses with fewer than 100 employees.
"I have introduced legislation to continue funding this critical program so we can help even more employers grow jobs," Malloy said in a statement.
The 2-year-old Small Business Express Program, hatched during Malloy's special legislative jobs session in 2011, has been under attack recently after revelations in The Day Lazy Burrito restaurants in Mystic and East Lyme, which had been funded by the state, had closed down. The program had given Gilbertie's Restaurant LLC of Colchester nearly $150,000 to fund the eatery's expansion, despite the fact that owner Tyler Gilbertie of Waterford, according to court records, had $728,000 in debt and his company was facing bankruptcy.
Records supplied by the DECD show that 11 other Small Business Express funding recipients, including Coastal Consulting of Stonington, also have closed down.
But Steve MacKenzie, executive director of the Southeastern Connecticut Enterprise Region, said these failures have to be put into perspective. Financial institutions normally can tolerate delinquencies in the 3 percent to 4 percent range, he said, which is significantly above the Business Express failure rate of 1.2 percent.
"That's meeting an industry standard with riskier-by-nature loans," MacKenzie said.
A list of businesses statewide that have received Business Express loans or grants shows that nearly 70 companies in the region have benefitted - from a construction company to a paintball park and from manufacturing to dance instruction. The DECD estimated about 700 jobs had been created or retained in southeastern Connecticut as a result of the program.
Statewide, the Malloy administration said about 3,600 jobs have been created and 10,400 jobs have been retained thanks to the Business Express program. Initially a two-year, $100 million program, it later was expanded to four years and $260 million.
"We definitely support the program and have from the beginning," MacKenzie said.
Dudley Molina, chief executive of the New London technology firm ePath Learning, said his company received a $50,000 low-interest loan and another $50,000 matching grant from the program, helping him develop a variety of new software products while hiring seven people.
"There's a great interest rate on grants," Molina joked, describing the funding-approval process as diligent. "I'd like to see more investments in this area in terms of software development. I think it's a great area to invest in."
Another Business Express funding recipient, chief executive Matt McCormack of QDiscovery - a technology firm formerly known as Quantum Discovery - said his business made a leap from three employees to 25, with a significant part of the growth - seven jobs - coming thanks to a state loan and matching grant totaling $200,000.
"It helps accelerate growth," McCormack said.
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