Specifics about Connecticut’s bridge loan program for small businesses were released by Gov. Ned Lamont this morning.
The Connecticut Recovery Bridge Loan Program will make $25 million available to businesses and nonprofits in the state that have 100 or fewer employees to assist with cash flow. Loan amounts are up to the lesser of either three months’ operating expenses and/or $75,000.
“We know that our small businesses and nonprofits have been hit hard by the public safety measures put into place to prevent the spread of this disease,” Lamont said. “Owners are understandably worried about their business, their employees and their future. This program was designed to provide immediate financial assistance to help these organizations maintain operations and get through this difficult time.”
Provisions and eligibility requirements include:
- Zero percent interest rate;
- 12-month term with a 6-month extension per request;
- Personal guaranty and credit score required;
- Approval contingent upon a business being profitable prior to March 10, 2020, and no adverse personal credit reports 60 days past due for the last six months; and
- Ineligible companies include those involved in real estate, multilevel marketing, adult entertainment, cannabis and firearms.
All eligibility and application information can be found on the state’s COVID-19 website at ct.gov/coronavirus.
Early results of a business survey being conducted by the nonprofit organization AdvanceCT, in partnership with the Department of Economic and Community Development and the Connecticut Business and Industry Association, indicate that companies’ most critical need at this time is assistance with cash flow, with 82 percent of respondents expecting a drop in revenue due to the virus.
“We have been in close communication with our small business and nonprofit communities throughout this crisis and certainly understand their sense of urgency,” DECD Commissioner David Lehman said. “We believe this program provides the quick, short-term financial assistance they need to maintain operations and weather this storm.”
Underwriting support for the program is being provided by Connecticut Innovations.
CBIA president and CEO Joe Brennan called the new Connecticut Recovery Bridge Loan Program critical for providing small businesses with immediate, much-needed liquidity.
“Putting cash in their hands to pay their employees and their bills for several months will hopefully allow them to stay in business until the crisis is over,” he said.
Brennan noted that the new loan program was one of a series of steps taken by the Lamont administration to lessen the pandemic’s impact on small business.
The DECD has already suspended loan and interest payments on existing loans, while the Department of Revenue Services extended the filing deadline for income tax returns to July 15.
“All signs indicate that we’re only at the beginning of what will be a very difficult and challenging time,” Brennan said. “It’s clear the state’s economy will take a major hit and we will continue working with the Lamont administration and the legislature to provide all possible resources and assistance.”
“It’s great to see the state act promptly to address the problems small businesses are facing right now with cashflow which is making it hard for many to stay afloat,” said Andrew Markowski, state director of the National Federation of Independent Businesses (NFIB). “Clearly, there’s a shared recognition of the essential role small businesses play in our economy and will play in our recovery.
“The bridge loans will help provide the money these businesses need now to pay the bills and keep employees on the payroll even when their doors may be temporarily closed,” Markowski continued. “For some, this cash may mean the difference between getting through the next couple of tough weeks or shutting their doors for good.”