The Department of Economic and Community Development has launched a $150 million lending program targeting small businesses and nonprofits in low-income and historically underserved communities as persistent stress of COVID-19 and new concerns of recession weigh on their minds.
Starting Monday, businesses and nonprofits can apply online for low-interest loans through the 海角换妻 Small Business Boost Fund . Administrators will evaluate applications and match business owners with lenders and community development financial institutions to provide funding and technical support. The state will provide half the funding, $75 million; the other half will come from private partners, including Citizens Bank, M&T Bank and First Republic Bank.
Companies with 100 or fewer employees and annual revenue less than $8 million can apply for loans of up to $500,000. As they pay back the loans, that money will go back into the Boost Fund, perpetuating the program, DECD officials said.
鈥淲e realize and remember that it鈥檚 small companies that create 90-plus percent of the jobs, and it鈥檚 small companies that are part of the community, live in the community, hire in the community, and make a difference,鈥� Gov. Ned Lamont said at a press conference at Schwerdtle, a 143-year-old small manufacturing company in Bridgeport. 鈥淚n communities, like here in Bridgeport, there鈥檚 not a lot of 鈥榝riends-and-family鈥� money to get to that next stage. We are the friends and family, buddy.鈥�
Lamont said when there鈥檚 a risk of recession, traditional banks and lenders often tend to pull back.
鈥淲hen you have the state coming in alongside of the bank, putting our money and capital at risk alongside them, that gives people confidence,鈥� Lamont said. 鈥淎nd that鈥檚 how you get out of recession, continue to grow, continue to expand, make sure that those financial lifelines don鈥檛 dry up.
Mark Muro, a policy analyst with the Brookings Institution, said inflation and angst about a possible recession has cast a 鈥渟hadow鈥� over the next year or so.
According to , 93% of small businesses are concerned about recession coming within the next year.
鈥淚n that sense, this kind of counter-cyclical support, especially for under-represented businesses, seems welcome,鈥� he said.
Muro said the businesses targeted by 海角换妻鈥檚 Boost Fund need help even in good economic times, 鈥渟o if there is a recession coming, this will provide welcome support.鈥�
The program announced Monday is a revamped and updated version of Small Business Express, a grant and lending program the state administered for roughly a decade. DECD Commissioner David Lehman said the Boost Fund has 鈥渁 different philosophy and framework,鈥� targeting businesses owned by women and people of color, located in distressed communities.
鈥淯nder Small Business Express, we were making loans across the state, and we were competing with banks. We don鈥檛 want to do that anymore,鈥� Lehman said. 鈥淪econdly, we鈥檙e working with the private sector, folks that are experts in making loans. So there鈥檚 lots of other people at the table, making that decision. It鈥檚 not just the state saying this is a loan we should make.鈥�
The state selected New York-based National Development Council to administer the program. NDC works with a handful of other states on similar programs, but President Daniel Marsh said 海角换妻鈥檚 Boost Fund will be its largest to date.
NDC has selected a group of new and experienced community development financial institutions, or CDFIs, to help 海角换妻 businesses and nonprofits with training and advisory services. They include Ascendus, Capital for Change, HEDCO, Pursuit, Southeastern CT Enterprise Region (SeCTer) and NDC鈥檚 own Community Impact Loan Fund. Marsh said NDC was planning 鈥渁n intensive marketing campaign鈥� to reach businesses in the communities 海角换妻 is targeting.