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May 5, 2020

This CT publicly traded company received a $2.2M PPP loan

Photo | Contributed Some of the casino ticket printers that TransAct Technologies sells.
By Greg Bordonaro

Hamden transaction-hardware vendor TransAct Technologies Inc., a publicly traded company that announced staffing and pay cuts at the end of March, said Tuesday it has received a $2.2 million Paycheck Protection Program loan that will allow it to bring back furloughed workers. 

“During these unprecedented times, we are taking proactive steps to plan for the future of TransAct’s customers, employees, and investors,” said Bart Shuldman, the company’s chairman and CEO. “The [Small Business Administration] PPP funding provides financial flexibility and enhances our liquidity position so that we can retain our employees, which allows us to keep important projects going and support ongoing operations at a time when the world is experiencing great volatility. We expect to use the proceeds of the loan for purposes that will permit most of the loan to be forgiven, and we look forward to bringing back our furloughed workers.”

TransAct Technologies, which said in late March that it was scaling back expansion plans and cutting $1.75 million in operating expenses in response to the coronavirus’ impact on the food service and casino industries -- two key markets for the company -- becomes one of the few Connecticut businesses known to have received PPP funds, as the SBA hasn’t yet published a full listing of recipients (the agency has said the information will become available at some point since it’s subject to Freedom of Information law).

The disclosure of TransAct’s loan, which bears a 1% interest rate and matures May 1, 2022, comes shortly after Treasury Secretary Steven T. Mnuchin  announced that his office will review all loans in excess of $2 million, following public outcry of publicly traded companies receiving PPP loans, which are geared toward small businesses.

Some large public companies have given back loans in response to the criticism.

TransAct, which makes printing and back-of-house automation systems for the gaming and food industries as well as point-of-sale and other technologies, has a market value of $32.8 million and recently announced several cost-cutting moves, including a 10% across-the-board salary reduction for all salaried, non-commissioned employees, a reduction in sales commissions and furloughs for approximately 10% of its workforce.

It reported 134 employees at the end of December, according to its annual report.

Under the PPP program, a business with fewer than 500 employees can borrow up to 250% of its 2019 average monthly payroll costs as a two-year, 1% note, with repayment deferred for a period of six months. In the first eight weeks after the loan is approved, any amount the business spends on payroll costs, rent, mortgage interest and utilities will be forgiven by the lender on a tax-free basis.

Nearly 30,000 small business loan applications worth over $2.5 billion have been approved for Connecticut companies as part of the federal government’s second round of Paycheck Protection Program (PPP) funding as of Friday.

SBA launched the PPP on April 3 with $349 billion from the massive stimulus legislation known as the CARES Act. More than 18,000 Connecticut companies received about $4.1 billion in loans during that first round of funding.

The program received another $310 billion on April 27, after the initial funding pool dried up within two weeks, as small companies across the country struggle to stay afloat during the coronavirus pandemic.

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