Connecticut small businesses impacted by the coronavirus pandemic are now eligible for up to $2 million in U.S. Small Business Administration emergency relief loans.
The March 16 announcement came a day after Gov. Ned Lamont asked the SBA to expedite approval of disaster relief for Connecticut employers.
"The impact of this global pandemic to businesses across the state has been significant," Lamont wrote in a March 15 letter to the SBA's Office of Disaster Assistance in Atlanta.
"Businesses owners are unable to meet their financial obligations with this sudden reduction in revenues."
The loans became available March 16, the same day Connecticut, New York, and New Jersey shut down bars, restaurants, gyms, and movie theaters.
News of the loan eligibility was first shared yesterday on a conference call for small businesses hosted by CBIA, the MetroHartford Alliance, the Department of Economic and Community Development, the Hartford Foundation for Public Giving, and the SBA.
SBA assistant district director Moraima Gutierrez told those on the call turnaround time for loan applications could be up to three weeks, "but it could be less."
"This is to keep them in business, to help them pay fixed debts, payroll, any working capital, or just for cash flow purposes to get them through this period of time.
"There are no prepayment penalties down the road once everything is up and running."
Small businesses that do not have credit elsewhere can apply for loans at a 3.75% interest rate and receive flexible payback terms up to 30 years.
The rate is 2.75% for nonprofits.
Small businesses can learn more about the loans here or by calling the SBA at 800.659.2955.
"This is a very important step in trying to mitigate the economic hardship falling on small businesses due to COVID-19," CBIA president and CEO Joe Brennan said.
"We thank Gov. Lamont for acting quickly in making this request of the SBA.
"Thanks also to DECD commissioner David Lehman for his work on this and other measures to help businesses and their employees through this difficult time.
"We also appreciate the SBA's quick turnaround on the expedited disaster assistance request."
Efforts to slow the spread of the coronavirus in Connecticut are having a major impact on businesses and the state's economy.
The Connecticut Department of Labor processed more than 8,000 unemployment compensation claims over the weekend and another 10,000 on Monday.
That was before the state joined New Jersey and New York in closing movie theaters, bars, gyms, and fitness centers, while restricting restaurants and bars that serve food to takeout service only.
"Retail, entertainment, tourism, they are feeling the most immediate impacts right now," Brennan said.
"Others will feel it over time depending on the duration of this. If there is less business transacted depending on whether you are a law firm, an accounting firm, real estate agent, you go down the list of almost any occupation.
"Some can still manage to do business remotely. It's more what are your clients and customers doing?
"If they are sheltering at home, then that's going to have a certain diminishing factor on the amount of business that gets transacted.
"The bottom line is this—and I know it’s a cliché to say now—is unprecedented territory. But it's true. Each day things develop and it gets more and more intense."
Lehman is directing the Lamont administration's discussions with the legislature on a possible economic stimulus package.
"We are having conversations with the legislature and it's on the front burner," he told the Hartford Business Journal.
"If the economic impact from this is longer and broader than what I think it should be, then everything is on the table."
Lehman says he is focused on three areas, beginning with what responses the state and DECD can manage without legislative approval.
DECD has temporarily suspended principal and interest payments on loans to small businesses.
The state Department of Revenue Services extended the filing deadlines for certain annual state tax returns by at least 30 days while the Department of of Labor is making broader use of unemployment insurance benefits.
Lehman's second priority is addressing what residents and businesses will need in the near term if they cannot access existing state and federal benefits.
And the third, longer term priority is stimulating economic development and growth once the pandemic eases.