18K businesses and nonprofits applied for state pandemic relief
When the federal Paycheck Protection Program petered out last summer with businesses leaving billions of dollars on the table in untapped pandemic relief, it came as a surprise to some.
It comes as no great shock to Glendowlyn Thames that Connecticut small businesses are snapping up every last penny of $50 million in grants the state will gift wrap on the eve of the holidays, as the pandemic drags into its ninth month.
Some 18,000 small business owners have put in for $5,000 grants to be awarded by the state Department of Economic and Community Development, with funding only sufficient for 10,000 of that number.
The funding was made possible under Connecticut’s allocation of funding from the federal Coronavirus Aid, Relief and Economic Security Act, representing a sliver of the nearly $17 billion that has been distributed to the state as unemployment assistance, Medicaid support, and the PPP program among others, as calculated by Gov. Ned Lamont’s budget staff.
Thames is overseeing the CT CARES Small Business Grant program in her role as deputy DECD commissioner. She expects grants to be distributed beginning in mid-December and that they represent “a shot in the arm at the right time,” in her words, for many small businesses going through an extended stretch of dampened demand.
“This was really targeted to our smallest of smallest businesses,” Thames said. “We recognize that the amount in its totality might not seem like a lot of money — but ... when you are looking at these small businesses, that $5,000 might really matter. It can be three months worth of rent, or utilities, or inventory.”
DECD’s application window closed last week. Business owners must specify how they plan to spend the money and attest that they have no other viable options are at hand to cover those expenses, with the state Department of Revenue Services also reviewing applications to ensure awards go to businesses that are not carrying overdue tax bills due Connecticut.
Half the available money will be reserved for small businesses in 25 communities DECD
classifies as “distressed” by income and employment measures, including Bridgeport, Hartford and New Haven. A DECD spokesperson indicated on Tuesday the department has yet to set priorities after that, with the potential for thousands to be left out of the money.
Many of those business owners complained of being shut out of the Paycheck Protection Program last spring, through which the U.S. Department of the Treasury extended $525 billion in loans nationally including $6.7 billion in Connecticut. Businesses are able to have the full amount of those loans forgiven if they can demonstrate they do not lay off workers during the terms of the agreements.
The PPP program skewed small business lending data analyzed quarterly by the Federal Reserve which serves as one benchmark for loan availability. In its assessment of the re
gional economy in September and October, the Federal Reserve Bank of New York reported that banks have tightened their credit standards for commercial mortgages, but otherwise have kept their standards stable across other business lending categories.
DECD offered a bridge loan program last spring as businesses waited for PPP approvals, but this time around opted to disburse small grants with many businesses averse to going deeper in the hole.
“We heard a lot of feedback from businesses as to [their] high anxieties, that that they can’t take on any more debt and they really needed some cheap money — (or) free money, for lack of a better word,” Thames said.