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March 27, 2020

Lehman: DECD to double size, freeze small biz loan program after receiving 4K applications

HBJ Photo | Steve Laschever Department of Economic and Community Development Commissioner David Lehman
By Joe Cooper

Connecticut’s one-day-old emergency bridge loan program to help small businesses survive the COVID-19 outbreak is being inundated with applications and will temporarily halt Friday at 6 p.m., according to the state Department of Economic and Community Development.

DECD will also double the funding in the program from $25 million to $50 million, Commissioner David Lehman said in an email Friday afternoon to industry stakeholders. DECD had already upped the size of the overall loan pool from $20 million to $25 million as of Thursday morning.

The program allows a maximum loan size of up to $75,000 and loans carry a 0% interest rate. 

“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,” Lehman said. “We want to be fair to all applicants and taking more requests would not be right.”

In the last day, DECD and the state’s quasi-public venture and lending arm Connecticut Innovations (CI) have added additional staff to process applications for the loan program, he said. 

The two agencies, which will be reviewing and funding the loans, will continue to monitor the pandemic and communicate potential changes with small businesses and nonprofit organizations, Lehman said.

To qualify for the loan program eligible Connecticut businesses must have 100 or fewer employees and have been profitable prior to March 10, with no adverse personal credit reports 60 days past due for the last six months. Borrowers must make personal guarantees for the loans, and a credit score is required.

In addition, no real estate, multi-level marketing, adult entertainment, cannabis or firearms companies will receive the loans, DECD said.

The loans will have a term of 12 months, with the possibility for a six-month extension.

Applications and further information about requirements for the Connecticut Recovery Bridge Loan Program can be found here.

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