Since its inception in 2011, Connecticut's Small Business Express program has financed over 1,600 deals through $254 million in loans and grants.
The Hartford Business Journal reports that small businesses engaged in the program agreed to create or retain 25,791 jobs in the state.
Administered by the Department of Economic and Community Development, the Small Business Express program was created to provide capital investments of up to $400,000 to small businesses.
The Journal reported that 55 companies that received a total of $9.5 million in loans and grants are no longer in business.
In addition, the analysis found another 138 companies that received $19.6 million in loans and grants were penalized for failing to meet job targets.
These penalties are meted out through a higher interest rate or a loss in grant funding.
DECD deputy commissioner Bart Kollen defended the default rate, saying it compares favorably to loan defaults that banks experience and that the agency's "portfolio would look rather positive compared to a lot of commercial lenders."
However, the program's future appears in question as the two-year bipartisan budget lawmakers recently approved cuts funding by $5 million in 2018 and eliminates it entirely in 2019.
Gov. Dannel Malloy said he wants to work with lawmakers in the coming months to consider alternatives to the program.