Applications for the CT Recovery Bridge program opened Thursday, and the West Hartford Chamber of Commerce, West Hartford Center Business Association, and other organizations are urging eligible businesses to apply quickly because the funds are available on a first-come-first-served basis.
By Mark Pazniokas, CTMirror.org
Connecticut offered its first financial assistance Wednesday to the small businesses whose revenues have shrunk or disappeared as a result of the steps ordered by Gov. Ned Lamont to slow the spread of COVID-19, the disease cased by the novel coronavirus.
The relatively modest $25 million loan program outlined by Lamont and his economic adviser, David Lehman, is intended as a quick source of cash to small businesses while the federal government works to distribute $350 billion in forgivable loans.
“The real focus here is on immediate liquidity and flexibility for our smallest businesses, because we realize how hard hit they are,” Lehman said.
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 resume by then, or repayments will be covered by the coming federal money. The loans are limited to businesses with no more than 100 employees. The money will come from revenue on repaid loans administered by the state Department of Economic and Community Development.
“We want to make sure that businesses have enough cash to meet their payroll, to meet their rent, to meet their insurance and other costs for this three-month period as we battle the virus,” Lehman said.
The Connecticut Recovery Bridge Loan Program was rolled out as the U.S. Senate prepared to approve an unprecedented $2 trillion in relief to a nation whose economy is being crippled by keeping workers home and closing restaurants, shopping malls and many other businesses in an effort to slow COVID-19 .
“You get a little nervous, don’t you, when Congress in less than a week comes up with a bill which is about is $2 trillion in immediate relief – $2 trillion, by the way, is about half of the total federal budget of the United States of America,” Lamont said. “It’s about 10% of our overall economy.”
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.
Lamont expressed relief at being able to promise the first measures of financial assistance that he says will begin to address the financial and emotional needs of workers and small-business owners rocked by the sudden loss of jobs and revenue as the nation hit the pause button on the economy.
Those fears are registered in the daily calls to the United Way of Connecticut 2-1-1 hotline. Launched on March 7, it has fielded 8,035 calls.
“They’re terrified about where they’re going to be – folks who have lost all their income, folks who have lost a job, folks who have seen their restaurant shut down, worried about unemployment, worried about business support,” Lamont said.
Lamont said the state is offering immediate cash, albeit a limited amount. Information on how to apply is expected Thursday.
“Our small businesses, a guy with a restaurant on Main Street in New Britain or a bar in Waterbury, they’re not looking for a tax credit. They’re not looking for a payroll tax deduction. They don’t have any income,” he said.
But quickly getting money to people whose lives have been upended by an instant recession – at least 100,000 jobs lost in a blink in Connecticut – is a challenge. The state Department of Labor has a three-week backlog in processing unemployment claims, up from just three days a few weeks ago.
On Wednesday Connecticut reported an increase of more than 200 confirmed COVID-19 cases for the second consecutive day. Totals announced Wednesday afternoon also indicate 875 patients, including 113 who are hospitalized., and 19 deaths attributed to the coronavirus.
How to use the Connecticut Recovery Bridge Program
For further information on the Bridge Loan Program, contact DECD at (860) 500-2333 or via email at [email protected]. Email is recommended due to high volume on phone lines.
To be considered for this program, your business or nonprofit must:
- Have no more than 100 employees
- Be in good standing with the Department of Revenue Services (DRS) & DECD
- Have been profitable prior to March 10, 2020 – with no adverse personal credit reports 60 days past due the past six months
- Not be involved in real estate, multi-level marketing, adult entertainment, cannabis or firearms; nor be a state elected public official or state employee
Terms & Conditions
- Loan maximum of (a) $75,000 or (b) three months operating expenses, whichever is less
- 0% interest rate
- 12-month term, with 6-month extension available per request
- Freely pre-payable
- Working capital loan
- Personal guarantee and credit score required
How to Apply
The following information will also be required:
- Project Financing Plan & Budget
- 2019 Income Statement (or) Profit and Loss Statement
- Internal Financial Statements (YTD)
- 3-month projected cash flow, demonstrating need
- Summary of adverse economic impact resulting from COVID-19
- Recent credit score report
- Applicant Structure Documents
- Personal Financial Statement
- Ownership Breakdown
- DRS Letter of Good Standing