Small businesses praise COVID loans

REDDING — Prospects for small businesses are uncertain as greater Danbury rides out the second coronavirus wave, but the promise of new federal loans to keep payrolls whole through the winter is providing hope that the economy can survive whatever 2021 brings.

The reason: the first round of federal Paycheck Protection Program loans in the spring were lifesustaining for scores of local businesses that might not have otherwise survived.

“Not only did the program give us physical dollars but it was also psychologically very reassuring, because it gave all of us in the business community confidence to make decisions that we definitely would not have made,” said Michael LeBlanc, owner of Redding-based CCi Voice, who received a $122,000 loan in April to cover paychecks. “We’re moving forward because of it.”

A local general manager in the hard-hit hospitality industry agrees.

“We have already had conversations to let them know we would like to apply for the second (stimulus) round, which for the catering business is so important,” said Douglas Polistena, general manager of the Amber Room Colonnade, where business is down 70 percent. “Keeping positive right now is the most important thing.”

The federal Small Business Administration is rolling out application rules for the new round of the Paycheck Protection Program included in the $900 billion CARES Act 2 that was signed into law two weeks ago.

The stimulus is expected to bring $9 billion to Connecticut—– about $3 billion of which could be loaned to small businesses such as Berkshire Broadcasting, which owns WLAD and five other radio stations in greater Danbury.

“Under the new rules of the second round, we need to show a loss of 25 percent in revenue in any quarter in 2020, and unfortunately we meet that requirement,” said CEO Irv Goldstein, who qualified for a $148,000 PPP loan in April for Berkshire’s 13 employees. “It certainly didn’t make up for the revenue that was lost but it did enable us to maintain the same level of employees and cover other costs of the business.”

At the same time, small businesses across greater Danbury are in the process of having their PPP loans from the spring forgiven. The government requires small businesses to certify that loans were used only for payroll, rent and utilities.

A Ridgefield architectural firm has already had its $148,000 loan forgiven.

“We were very careful to only apply for what we needed for payroll,” said Peter Coffin, a principal at Doyle Coffin Architecture in Ridgefield. “Absolutely, it helped me keep my staff.”

Business is going so well, Coffin says, that he won’t need to apply for a second paycheck loan.

Other small business owners say the economy is still too stifled to get through the winter months without federal help.

“In the summer, people got more comfortable and everything picked back up,” said John Geary, whose New Milford plumbing company received a $38,000 loan in April to keep his four workers employed full time in the sluggish construction business. “But there is still a backup in the supply chain, and still a delay to get things done.”

If the experience of last year’s paycheck protection program is any measure, the new round of PPP loans will save jobs, preserve local companies, and keep the economy running until the warm weather beings, business leaders said.

“It was a lifeline in the first round and it’s even more so this time around,” said PJ Prunty, the executive director of the Greater Danbury Chamber of Commerce. “In the first round, some businesses may have been able to tap into their reserves, but in this round some of those reserves are depleted.”

The leader of a nonprofit that lends microloans to the underserved agrees.