HARTFORD, CT — The state of Connecticut is preparing to help business weather the COVID-19 pandemic by offering an additional $25 million in 0% interest loans to small businesses.
The no interest loan, according to Department of Economic and Community Development Commissioner David Lehman, will be targeted to small businesses and nonprofits with up to 100 employees.
The loans will last 18 months and the size will be based on three months of operating expenses.
“We want to make sure that businesses have enough cash to meet their payroll, to meet their rent, to meet their insurance and other costs over this three month period,” Lehman said.
Lehman said businesses who laid off employees during this two week period will be eligible for the loans, but those loans will be based on the operating expense and payroll they have now, not what they had before they may have scaled back.
The loans will be capped at $75,000 per small business.
The $25 million is coming from the Small Business Express program. The application for the program is expected to be available on the DECD website by Thursday morning.
“We anticipate these loans will be paid back when the economy comes back to normal,” Lehman said.
Gov. Ned Lamont said Wednesday that the state is paying attention to the small business owners and are concerned about how they are going to keep the lights on for the next three, four and five months.
But Connecticut is hoping it doesn’t have to go it alone.
“We’re looking over the horizon and we’re hoping the cavalry is coming up from Washington D.C.,” Lamont said.
The $2 trillion federal stimulus bill working its way through Congress includes $350 billion for eight weeks of cash-flow assistance to small businesses.
Lehman said Connecticut could get around $3 to $3.5 billion in help from the “Paycheck Protection Program” for small businesses. Those loans will go to small businesses with 500 or fewer people and will be available to sole proprietors or businesses with employees.
He said the loans could become a grant and will equal 250% of a company’s average monthly payroll, with a maximum loan of $10 million. He said the loans will become a grant if a company can maintain its payroll retroactively to Feb. 15, the loan will become a grant.
In order to get the money in the hands of small businesses faster, the federal legislation allows private banks and other lenders to make the loans.
Lehman said if you’re part of the gig economy or a sole practitioner “you’ll also be able to apply for these loans.”
As of Wednesday evening, 875 Connecticut residents had tested positive for COVID-19 and 19 of those have died.
There are 106 patients in the hospital.
More than 5,898 tests have been conducted in Connecticut among both state and private laboratories, but testing has slowed recently as the state and labs have struggled to get a hold of the reagents or the testing materials.
“The rate of infection is up and we’re not doing quite as many tests right now,” Lamont said. “We’re still looking to do everything we can to make sure we have the reagents and the other devices we need to make the tests go.”
Josh Geballe, Lamont’s chief operating officer, said they also have $10.9 million in orders to purchase personal protective equipment.