Gov. Ned Lamont is rewriting how Connecticut helps small businesses by transitioning the Small Business Express Program, into a low-interest loan program for small businesses.
The public-private partnership dubbed the “Small Business Boost Fund,” will accept applications for loans running from $5,000 to $500,000.
“The boost fund is how we’re trying to do things differently,” Lamont said at a press conference at Schwerdtle manufacturing company in Bridgeport.
The loans have a fixed, 4.5% interest rate and are available to eligible small businesses and nonprofits in Connecticut that have 100 or fewer full-time employees and annual revenue of less than $8 million.
The state is making an investment of $75 million into the program through bond funds and the other $75 million will come from private lenders, including M&T Bank of Bridgeport. The transition to the new program, away from the one approved in 2011 with bipartisan support, was part of this year’s budget deal. It allows the Department of Economic and Community Development commissioner to partner with nongovernmental entities to carry out the program.
David Lehman, DECD commissioner, said the state had traditionally handed out money but it ended up competing with banks.
“We were making loans across the state and we were competing with banks and we don’t want to do that anymore,” Lehman said. “We’re being very targeted with the funding.”
“Secondly, we’re working with the private sector, folks who are experts in making loans,” Lehman added. “So there’s lots of other people at the table making the decision, so it’s not just the state saying this is a loan we should make.”
The goal is for the fund to become self-sustaining as more private funds are invested.
And instead of equity investments like the ones made by Connecticut Innovations, these will be loans to companies and the repayments will be used to grow the fund. The loans will be targeted to companies owned by black and brown individuals and women.
Kathy Saint, president of the manufacturing company Schwerdtle, said she will definitely take advantage of the funding.
“We’re always getting new equipment. You have to in order to stay competitive,” Saint said. “We just redid all of our servers. That was $40,000. We have a couple $250,000 machines back there that we purchased in the last couple of years.”
But isn’t there anything else the state can do to help small businesses?
Lamont’s Republican opponent, Bob Stefanowski, said “Small businesses are suffering with inflation, gas prices, diesel costs and millions of dollars in higher taxes raised on them by Governor Lamont. They need relief, not another big government program.”
Lamont said the state’s unemployment rate is headed in the right direction and predictions are that inflation will start to decline in the coming months.
He said workforce participation is also up, even though the state still has more than 100,000 job openings.
“The most important thing we can do outside of holding the line on taxes … is just speed things up,” Lamont said.
He said giving small businesses access to this capital will help speed things up for them.
Small businesses and nonprofits can apply online at CTSmallBusinessBoostFund.org, and if they qualify, they will be matched with a lender. Once matched, the participating lender will assist the business owner throughout the application process.