Local firms got millions in PPP loans
Stamford IT companies, nonprofits among recipients in $2M-$5M range
The list of Stamford and Greenwich recipients of federal Paycheck Protection Program loans does not end with stores and restaurants struggling to survive through the current health crisis. It also includes professionalservices firms, media powerhouses, manufacturers, commodities traders, information-technology specialists and nonprofits — and many other types of enterprises in the southwestern tip of Connecticut.
In total, about 750 loans, each worth between $150,000 and $10 million, went to firms based in one of the two communities.
Responding to pressure for more transparency from Congress and media outlets, the U.S. Small Business Administration last week disclosed new information about who participated in the $660 billion Paycheck Protection Program. The new data has revealed the broad range of firms in Connecticut that have benefited from the lending — but it has not dispelled concerns about PPP’s ability to distribute funds to distressed small businesses.
“There was tremendous need and urgency for this program to provide immediate relief to small businesses that were hanging by a thread, and many of them are still struggling,” U.S. Sen. Rich
ard Blumenthal, D-Conn., said in an interview this week. “We have information now that should have been provided long ago, and the administration resisted providing (it) at all. We insisted on that information being made public, but the program is still lacking in transparency.”
Recipients small — and not so small
Approximately $6.7 billion worth of PPP funding, divided among about 61,000 loans, has been approved for Connecticutbased firms. Those loans can be fully forgiven if businesses meet certain requirements, which include spending 60 percent of their allotments on payroll expenses.
The total includes about 8,600 loans of at least $150,000 and up to $10 million, for a total of nearly $5 billion. The new data did not show the exact amount each business received.
Loans of less than $150,000 comprise the remaining $1.8 billion that has been shared among firms in the state. Their names and addresses were not disclosed in the SBA filings.
While “small business” often connotes enterprises with only a few workers, PPP’s 500-employee cap for applicants paved the way for a broad spectrum of firms to participate.
Among the half-dozen companies in Stamford and Greenwich that received loans of $5 million to $10 million, two of them retained 500 jobs, according to SBA: Stamfordbased printing firm Cenveo and Stamford-based NCL Acquisition Corp. Neither firm could be reached for comment this week.
Among those receiving loans between $2 million and $5 million were the
Stamford-based American Institute for Foreign Study, Stamford-based law firm Cummings & Lockwood and Greenwich-based Interstate Lakeland + Lumber. The IT firms MTM Technologies and Protegrity in Stamford and Greenwich-based Edge Technology Group received loans in that range.
Five of the area’s recipients of $2 million-plus loans were nonprofits: Americares Foundation and Children’s Learning Centers of Fairfield County, which are both based in Stamford, and Greenwich based Abilis, Eagle Hill Foundation and Family Centers.
Right criteria?
While few have questioned PPP’s purpose, management of the funds has sparked debate.
In Stamford and Greenwich, a number of multimillion-dollar recipients had demonstrated their ability to fundraise and grow in recent years.
Greenwich-based Chicken Soup for the Soul, producer of the book series of the same name, raised $30 million in 2017 through an initial public offering for its Chicken Soup for the Soul Entertainment subsidiary.
Stamford-based medical communications firm The Lockwood Group, which received a loan between $5 million and $10 million, placed among the 500 firms on The Americas' Fastest Growing Companies list put out by the Financial Times in 2020.
Lockwood kept 260 jobs, while Chicken Soup retained 128 positions.
“If a business that has 400 employees keeps them employed when they otherwise would be furloughed or out of a job, that loan is cost effective,” Blumenthal said. “The question is really whether there needs to be a stronger measure of the need — in other words does the company need this loan to stay in business?”
Messages left for Chicken Soup for the Soul and The Lockwood Group were not returned.
Other observers pointed out the success that government interventions such as PPP have had in helping to contain the damage caused by the pandemic. Assisted by PPP, Stamford and Greenwich recipients that received at least $150,000 retained a total of nearly 25,000 jobs.
“I think companies were desperate to ensure they were taking care of their people as best as they could,” Eric Gjede, vice president of government affairs at the Connecticut Business and Industry Association, told Hearst Connecticut Media this week. “I don’t begrudge those companies for looking for loans to help take care of their employees. That’s what we want at the end of the day — less people filing for unemployment and more businesses trying to keep these folks on through any means necessary.”
Some of the smaller recipients, however, have expressed frustration about competing with larger applicants.
“The (application) process is so much easier for them,” Smith St. Juste, co-owner of Stamford restaurant La Perle told Blumenthal during a meeting at the restaurant last month. “Stuff that would take them half a day would take us two to three weeks.”
As a result they had to wait for the $100,000 loan the restaurant received through the program.
Blumenthal agreed, arguing that the program seemed to initially favor larger lenders serving bigger businesses.
“We sought to remedy that problem in the second stage of funding where we allocated specific amounts to smaller lenders and non-bank lenders,” Blumenthal said.
Despite the extensive criticism it has faced, PPP has convinced Blumenthal and enough of his colleagues on Capitol Hill to keep it going. Earlier this month, Congress extended the application deadline to Aug. 8.
“There’s $130 billion left right now — I hope all of it will be used,” Blumenthal said. “We will provide more, if necessary, for those small businesses that so far have been denied access.”