The Connecticut Restaurant Association reacted negatively to today’s announcement by Gov. Ned Lamont that he was forming a small-business relief program, saying that it “simply won”™t do enough.”
The Connecticut CARES Small Business Grant Program is designed to assist small businesses and nonprofits that have been impacted by the economic downturn caused by the global Covid-19 pandemic.
The program will provide businesses and nonprofits in Connecticut that have fewer than 20 employees, or a 2019 payroll of less than $1.5 million, with a one-time grant of $5,000.
The grants can be used for payroll, rent, utilities, inventory, purchase of machinery or equipment, or costs associated with compliance of the ongoing Reopen Connecticut Business Sector Rules.
The governor is directing the Connecticut Department of Economic and Community Development (DECD) to commit half of the funds to small businesses and nonprofits that are located in towns and cities designated as distressed municipalities.
To fund the program, the governor is committing $50 million from the state”™s Coronavirus Relief Fund, which utilizes federal CARES Act funding.
The program will be administered by the DECD.
“When it comes to the economic impact of this ongoing, global pandemic, the smallest businesses have been hit the hardest, and I”™ve spoken with so many owners who are doing their best to keep their workers employed and their businesses active during this incredibly challenging time,” Lamont said.
“This grant program will help provide some relief to these small businesses that are working each day to get through this,” he continued. “However, there is only so much that we have available for this program, and I urge Congress to reach a deal and adopt a much-needed relief package that will help give our economy a boost and speed up the recovery.”
DECD estimates it will begin accepting online applications the week of Nov. 9, with all of the funds are anticipated to be disbursed by Dec. 30. Information on eligibility requirements, upcoming webinars, and other aspects of the program will be published on the state”™s business portal at business.ct.gov.
However, Connecticut Restaurant Association (CRA) Executive Director Scott Dolch viewed the move with skepticism.
Noting that a coalition of state business associations, including the CRA, last week wrote a letter to the administration asking for some $70 million in CARES Act-related relief, Dolch said: “While we appreciate their attention to this matter, the plan they”™ve put forward today falls clearly short of what other states are doing. We hope this is just a first step to match what other states are doing to keep small businesses open.”
Dolch added that Maine is allowing up to $100,000 in small-business grants, New Hampshire up to $300,000 and Vermont $350,000. “Not only that,” he said, “but each of these states, while smaller in population, has a program that is larger in total dollars than Connecticut”™s at $50 million.
“That increased funding is allowing them to also beat Connecticut when it comes to eligibility,” he said. “By limiting the program to businesses with 20 full-time employees or less, Connecticut will leave thousands of small businesses ineligible, which is why most states are using a 50 full-time employee limit or higher.
“Helping small businesses is one area where Connecticut simply cannot afford to lag the region to this degree,” Dolch said. “We need as many small businesses as possible to stay in business so they can be part of our economic recovery in 2021. The program announced today, while well intentioned, simply won”™t do enough, and we hope that Connecticut can and will do more.”
Andrew Markowski, Connecticut Director of the National Federation of Independent Business, was more impressed.
“We are at a critical juncture seven months into the pandemic because the smallest businesses had little in the way of cash reserves, they”™ve used up paycheck protection loans, and they probably are deciding if they can stay open,” he said. “These grants may help them to cover rent, buy supplies and getting through this difficult time.
“There is a new optimism among many small business owners nationally,” Markowski continued, “but the entrepreneurs with just a few employees have had a harder time. If they can make it until there is a vaccine and consumer confidence returns, they may help lead Connecticut”™s recovery. This is a first step, but small businesses harmed financially through no fault of their own, may need additional assistance in the future.”
The state”™s previous program to support businesses through the pandemic, the Connecticut Recovery Bridge Loan program, provided $41.8 million in loans to 2,122 companies across Connecticut.
Similar to how that program was administered, DECD will partner with SoFi, whose advanced technology capabilities will help process the grant applications and distribution of funds in a timely fashion. SoFi, which has over 1 million members, is providing its third-party services pro bono to support Connecticut and relief program.
