Over 2,000 Small Businesses Tap State COVID-19 Loans
More than 2,000 small businesses received COVID-19 pandemic assistance through the Connecticut Recovery Bridge Loan Program.
The average loan was for just under $20,000 and a total of 2,123 small businesses participated.
The state Department of Economic and Community Development devised the low-interest loan program to help small business owners navigate the pandemic.
Businesses must pay back the loan one year after receiving the funds, although a six-month extension is possible.
State officials introduced the bridge loan program in late March, initially setting aside $25 million then quickly doubling it to $50 million.
DECD also halved the maximum loan amount from $75,000 to $37,500 due to the overwhelming number of applications.
The program was so popular DECD closed applications the day after it began.
“I still to this day think it was the right [decision],” DECD commissioner David Lehman told the Associated Press.
“We wanted to touch as many businesses as possible.”
Connecticut was one of several states—and some large cities—that offered no- or low-interest loans to small businesses hurt by the pandemic.
New Jersey, Florida, Louisiana, and Pennsylvania were among the states offering loans, along with cities including Denver, San Francisco, and Chicago.
Of the bridge loans Connecticut approved, 27.5% were issued to women-owned businesses and 15.4% to minority-owned businesses.
In addition to the bridge loans, 64,629 Connecticut businesses received a total of $6.7 billion in Payroll Protection Program loans from the federal government, an average of about $104,000 each.
The loans are forgivable providing the business meets set requirements.
Lehman said 80% of Connecticut businesses that received bridge loans also got PPP loans.
Another 20,000 Connecticut businesses received a total of $1.4 billion in low-interest Economic Injury Disaster Loans through the Small Business Administration.
Given those federal programs, Lehman said he doesn’t anticipate the state offering another round of bridge loans.
Lehman said federal officials should take the lead since the pandemic is a nationwide, not a state, issue.
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