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The state of Connecticut will roll out a small-business recovery loan fund as early as the beginning of next week to help small to mid-sized companies bridge short-term cash-flow interruptions caused by the economic upheaval precipitated by the coronavirus pandemic.
The announcement came Wednesday afternoon on a conference call with Gov. Ned Lamont and David Lehman, commissioner of the state’s Department of Economic & Community Development (DECD), to update the state’s business community on measures state government is taking to mitigate the pandemic’s economic impact.
“We at [DECD] are coming up with our own Connecticut small-business recovery loan fund to provide very low-cost bridge loans to small businesses in Connecticut in their time of need,” said Lehman. The timetable, he said, “was as soon as possible — likely to be early next week.”
The loan fund, he explained, will provide small low- or no-interest loans to be repaid over 12- or 18-month periods “until [companies’] revenues are flowing again,” he told some 2,000 listeners on the conference call. The purpose is to allow financially distressed businesses to cover three months of operating expenses, Lehman explained, “to make sure there is cash there.”
“We understand that there’s a need to supplement and provide more capital to business quickly and inexpensively,” Lehman added.
Maximum dollar limits for the bridge loans were still to be calculated, he said, but the purpose of the loans was to help companies cover cash shortfalls over periods of up to 90 days.
“I came out of a small-business background,” said Lamont, who made his fortune as a cable-television entrepreneur starting in the 1980s. “I went through the 2008-09 freefall,” he added, “where my revenues disappeared, but my fixed costs did not.
“This is worse,” he added.
The objective of the new program, which Lamont said he hopes to roll out early next week, is to function as short-term bridge financing for Connecticut companies whose revenue streams have diminished or evaporated. The present crisis “could be tough going for three or six or nine months,” the governor said.
The new loan program comes on the heels of Monday’s announcement that the U.S. Small Business Administration had approved disaster-relief loans of up to $2 million for small- and mid-sized companies as well as qualified non-profit organizations.
In addition, DECD last week surveyed Connecticut business owners on the degree of economic dislocation caused by the COVID-19 crisis. Some 3,000 companies had responded by Thursday morning, Lehman said.
Among the findings of the DECD survey:
“We understand the unprecedented challenge that’s going on here and the demand shock that has occurred,” Lehman said, “and we at the state level are doing and will be doing everything we can to help mitigate this.”
To learn more about the small-business recovery loan fund, business owners can phone the DECD hotline at 860-500-2333 or direct e-mail inquiries to covid19.jit@ct.gov.
For information about the SBA economic injury disaster loan program as well as to apply for financial assistance, companies can visit www.sba.gov/disaster or call the SBA at 1-800-659-2955.
“The business community and state government have had a sometimes complicated relationship,” said Lamont. “At this time of crisis, we want to make sure the small-business community knows what we’re doing” to navigate the pandemic and mitigate its economic fallout.
“I think we’re on the same page now,” Lamont added. “If we keep that spirit going, I think we’re going to get through this.”
As this pandemic progresses, it is expected to cause economic turmoil, the likes of which we have not seen in a generation. This program should help.
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Read HereThis special edition informs and connects businesses with nonprofit organizations that are aligned with what they care about. Each nonprofit profile provides a crisp snapshot of the organization’s mission, goals, area of service, giving and volunteer opportunities and board leadership.
Hartford Business Journal provides the top coverage of news, trends, data, politics and personalities of the area’s business community. Get the news and information you need from the award-winning writers at HBJ. Don’t miss out - subscribe today.
Delivering Vital Marketplace Content and Context to Senior Decision Makers Throughout Greater Hartford and the State ... All Year Long!
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