Demand overwhelms emergency business relief program — in two days
Gov. Ned Lamont doubled Connecticut’s emergency business relief program Friday — then immediately suspended applications — after demand quadrupled resources in the first two days.
The state will focus first on processing the roughly 4,000 applications to the Connecticut Recovery Bridge Loan program — representing asks of about $200 million — before deciding whether to recapitalize the program.
But at least one state legislator already has urged Lamont to expand the program, which the governor launched Wednesday with $25 million and doubled Friday to $50 million.
“We will continue to monitor this rapidly evolving situation and keep in close contact with our small business and nonprofit partners as they grapple with the effects of this pandemic on their operations and employees,” Department of Economic and Community Development Commissioner David Lehman wrote to business leaders in an email Friday. “We feel it is prudent to hit pause and stop taking more applications right now to ensure we can process the current queue efficiently and get this much needed money out the door as quickly as possible."
The administration has projected it could take up to 30 days to process all requests for assistance.
The state is offering interest-free loans calculated to cover three months of expenses for applicants, capped at $75,000. The loans can run for as long as 18 months on the assumption that revenues will return by then, or repayments will be covered by the coming federal money. The loans are limited to businesses with no more than 100 employees.
And while the money will come from revenue on repaid loans administered by DECD, Connecticut does have other pots of money it could tap.
Legislators have authorized hundreds of millions of dollars for various economic development initiatives in recent years and some leaders say a portion of that potential borrowing could be repurposed for the bridge loan program.
Time is of the essence
“I don’t think $25 million is enough and I hope they revisit this and start working on a second phase right away,” state Senate Minority Leader Len Fasano, R-North Haven, told the CT Mirror earlier this week, adding that restaurants and other businesses that have been forced to close by state order “should go to the head of the line” when applications are processed.
The president and CEO of the Connecticut Business and Industry Association, Joseph F. Brennan, said if the state can do more, time is of the essence.
“I’m not surprised by the demand,” Brennan said. “It just shows the gravity of the situation, the number of small businesses that have been impacted by the drastic slowdown in our economy.”
Many small businesses are hanging on day by day, Brennan said, adding that immediate assistance not only would keep companies afloat, but would ease pressure on unprecedented unemployment claim filings.
“We’re certainly hopeful that the state can marshal whatever resources that it can,” he said. “There are businesses that haven’t had any revenue in weeks now. Every day it’s growing exponentially, the number of companies that are severely impacted.”
But while state officials weigh the future of the bridge loan program, they will also direct Connecticut businesses to new federal assistance.
Lehman urged businesses Friday to turn to the U.S. Small Business Administration.
The $350 billion Payroll Protection Program will provide federally backed loans through local banks. The loans would not have to be repaid if the borrowers maintained their workforce. Larger companies that keep their workforce employed would be eligible for tax credits.
Keith M. Phaneuf is a reporter for The Connecticut Mirror (www.ctmirror.org). Copyright 2020 © The Connecticut Mirror.
Stories that may interest you
New York City has imposed a late-night curfew that failed to prevent another night of widespread damage, including arrests at the flagship Macy's store in Manhattan, following protests over George Floyd’s death
MARK PAZNIOKAS, Connecticut Mirror
Protesters have blocked traffic on Interstate 84 in Hartford to protest police killings of black people including George Floyd in Minnesota
A Connecticut judge has issued a ruling in a civil case against Fotis Dulos, who killed himself in January after being charged in the murder of his estranged wife
|More Coronavirus stories|
|Questions about Coronovirus and COVID-19||Coronavirus simulator|
|Coronavirus closures and cancellations|
All of our stories about the coronavirus are being provided free of charge as a service to the public. You can find all of our stories here.