To date, the Connecticut department of the Small Business Administration has approved more than $27.7 billion in loans to businesses in the state to get through Covid-19 ”” and more is on the way.
“The challenge for us has been trying to get these programs and information out to small businesses and other entities so they can take advantage of them,” Catherine Marx, district director of the SBA”™s Connecticut District Office, told the Business Journal. “It”™s really been a collaborative effort at all levels to make sure people understand the nuances of these programs.”
Arguably the best known of those initiatives, the Paycheck Protection Program, has been particularly impactful. The PPP”™s first round, which expired on Aug. 8, 2020, saw 64,629 loans approved in Connecticut for a total of $6.7 billion; the second round, which ended May 31, netted another 55,612 loan approvals totaling over $3.2 billion. Marx noted that while the program is now closed, some banks are still processing the loans.
PPP was also heavily criticized, especially in the early going last year, for being rolled out so quickly that banks and applicants alike were overwhelmed and confused by its seemingly ever-changing rules.
“There was a lot of learning for all of us as we went along,” Marx acknowledged, “and a lot of changes. But those changes were made to make the program better, more accessible, more nimble. And we needed to make sure we were doing what we could to prevent fraud and abuse.
“Never before had there been that type of national relief through a lending program,” she continued. “When people look back on it, in my opinion, there”™s going to be more talk about its success.”
The Shuttered Venue Operators Grant (SVOG) was similarly hampered at the start. Part of the $2.3 trillion Consolidated Appropriations Act, which was signed into federal law on Dec. 27, the $16 billion SVOG program launched on April 8 ”” and promptly shut down a day later when the SBA”™s portal crashed. It finally reopened on April 26, but funds have been slow to arrive.
“It made the PPP process look like child”™s play,” Dan Levine, artistic director of the nonprofit ACT (A Contemporary Theatre of Connecticut) in Ridgefield, told the Business Journal last month.
Testifying before the U.S. House Small Business Committee on May 26, SBA Administrator Isabel Guzman ”” who assumed office on March 17 ”” said: “The program had lots of controls for eligibility requirements. There were so many types of entities that were eligible with very unique requirements under each.
“While the program has been delayed,” she continued, “I feel confident that we”™ll continue to start to roll out these funds as we have been doing this week. We appreciate the patience from the industry. Obviously, they don”™t have time to wait. Their rent is due and other expenses are critical for them.”
As of June 3 ”” the latest data available ”” the SBA said it had received 13,783 loan applications seeking $11.4 billion; it had approved 50 totaling $54.2 million. In Connecticut, three loans have been approved ”” including one for Bridgeport”™s Downtown Cabaret Theatre ”” for over $615,000.
Unlike the PPP initiative, which was built off of the SBA”™s 7(a) Loan Program, the SVOG “is a federal grant that was built from scratch,” Marx said. “The system did crash, but we did a very good job of communicating with stakeholders what was going on. In the end, the SVOG portal and the entire process are proving to be successful.”
The agency is also processing Economic Injury Disaster Loans (EIDL) on a larger scale than usual. As of June 3, 36,819 loans totaling nearly $2.3 billion have been approved in Connecticut, along with the approval of 1,363 Targeted EIDL Advance loans (for businesses in low-income communities) totaling $11.4 billion and the approval of 776 Supplemental Targeted Advance loans (for small businesses and nonprofits that were most severely affected economically by the pandemic) totaling nearly $3.9 billion.
More aid for restaurants
Meanwhile, the $28.6 billion Restaurant Revitalization Fund, which launched on April 27, received more than 300,000 applications representing $75 billion in requested funds during its first two weeks. Although state-by-state data has yet to be released, Marx said that more than 63,000 food and beverage businesses owned by women, veterans and socially and economically disadvantaged business owners will be receiving over $15.5 billion over the coming weeks.
“That was another program that the SBA built from the ground up and it launched without any technical difficulties,” she said.
Even so, the program ran out of money on May 24; legislation was introduced in Congress on June 10 to pass the Restaurant Revitalization Fund Replenishment Act of 2021, which would add another $60 billion.
Marx, who maintains an office in Hartford and a satellite operation in Bridgeport, joined the SBA on Sept. 28, as a new wave of Covid was rising. Her previous roles include serving in Gov. Jodi Rell”™s administration, at the New York Regional Census Center, and as vice chairman of the Connecticut Republican State Central Committee.
“I haven”™t stopped since I walked in this door,” she laughed. “I understood the mission, but we all learned so much about the SBA and what it can do” during the pandemic. “I”™m grateful for being able to experience the positive execution of programs that can help people out.”
She also noted the boom in entrepreneurship that has taken place during the Covid era. According to CTData, the state netted 6,874 new businesses from March 2020, when the outbreak began, through April 2021.
“By necessity, many people decided the only thing they could do was to hang a shingle and try to start something up,” she said. “The pandemic impacted employees in all kinds of different areas, especially women.”
In general, Marx said, women felt more responsible for taking care of children suddenly at home 24/7. Starting a business at home “might have been the only way for them to take care of all their responsibilities. For a lot of them it was a matter of turning what had been a hobby into a business.
“People really had a chance to think about their passions,” she continued. “Starting a small business always starts with a passion, having an idea and wanting to run with it.”
Marx also believes that “it”™s easier than ever to access the information and resources you need to start your own business. We”™ve all made a giant leap in our technology usage and I don”™t see that going away.”
After all, she said, “Entrepreneurship is part of the American Dream. It”™s what so many people want to do. And one of the positives of the pandemic has been so many people looking to start their own companies.”
