Official: Expect more than $3B Conn. business aid from feds
As Connecticut restaurants and other businesses cash in checks for up to $20,000 from the state, Gov. Ned Lamont’s economic development chief said Tuesday he expects the newest federal infusion to result in as much as $3.5 billion in assistance for companies able to obtain it.
On Monday, the U.S. Department of the Treasury reopened the Paycheck Protection Program for new applications, offering loans that can be forgiven if companies do not furlough employees. After large banks dominated PPP’s initial round last year — leading many small business owners to complain of getting shut out out of the money — smaller community lending institutions were given first crack at taking applications on Monday.
More than 64,000 Connecticut businesses were approved for $6.7 billion under the program last year, amounting to just over $100,000 each or roughly $10,000 for each job saved under the program.
With banks swamped last spring with applications that delayed disbursement of PPP funding, the Connecticut Department of Economic and Community Development created a bridge loan program to provide immediate assistance. DECD Commissioner David Lehman said Tuesday Connecticut should be in line for as much as $3.5 billion if businesses actively seek funding under PPP.
With federal funding last year from the Coronavirus Aid, Relief and Economic Security Act, DECD created a $50 million program to award $5,000 grants to small businesses. That was followed by a $35 million program freeing up grants between $10,000 and $20,000 for hospitality industry businesses; and a $9 million grant program supporting nonprofits.
Speaking Tuesday on a Zoom conference, Lamont and Lehman said they see the PPP program as the best bridge for assistance to get businesses through the next few months, until COVID-19 vaccines become available more broadly and the return of warmer weather provides a boost for restaurants that are able to generate additional revenue through expanded dining outdoors. Lamont did not rule out the possibility of additional state aid for businesses, but suggested he wanted to see the impact of the newest PPP round of funding before determining any steps.
“We’re trying to do everything we can to keep the restaurants and (other) businesses open,” Lamont said Tuesday. “This 60-to-90 day period is really key to make sure your businesses stay in business, to get to that warmer day.”
State Sen. Joan Hartley, DWaterbury, and Rep. Caroline Simmons, D-Stamford, are chairs of the Commerce Committee in the Connecticut General Assembly, which has been assigned an early piece of legislation to “grow the economy by supporting diverse economic opportunities, worker protections and small business revitalization,” with no further details available immediately on Tuesday.
On the Zoom call Tuesday, a Hartford apparel store owner spoke through tears in describing her relief at receiving news she had qualified for state aid, and in describing the impact of office closures on downtown Hartford businesses.
“I’m not sure if anyone realizes what’s happening in downtown Hartford — our state capital right now is totally crumbling and is devastated,” said Jody Morneault, owner of Morneault’s Stackpole Moore
Tryon. “We are literally living on savings and credit cards — and I don’t want to close my store.”
Dan Meiser, chair of the Connecticut Restaurant Association, said he has experienced two sides of the pandemic in the five businesses he runs in Stonington and its tourist village of Mystic.
“Two of my restaurants, Oyster Club and Engine Room, those are your more-traditional, sit-down restaurants — those were the hardest hit,” Meiser said. “The flip side of that is we also have two casual, to-go concepts with Grass & Bone — which is a butcher shop and a market — and Nana’s (Bakery and Pizza), which quite frankly have thrived in this environment of ... takeout and delivery.”
Meiser said Oyster Club received a state grant, and that he can only hope business will rebound for the rest come April when the newest round of PPP funding runs its course.
“We’re really hoping, especially as we go into the spring and summer, that we’re going to see a pop, a boomerang effect, ... of people that have been isolated and quarantined at home this past year who really want to get out and get back involved with their communities and support their local economies,” Meiser said. “For us, this bridge grant program was critical (and) I know it was critical for so many other restaurants ... throughout the state, coupled with the second round of PPP.”
Other options might include easing regulations to help businesses in the short-term and support for businesses launching new operations as a result of the pandemic, according to David Lewis, CEO of the Norwalk-based human resources consulting and training firm OperationsInc and a board member of the Connecticut Business & Industry Association. Lewis added commercial real estate property owners are on the short-list of those needing assistance.
“Landlords are getting their clocks cleaned,” Lewis stated Tuesday in an email. “If a business [tenant] is otherwise healthy then they should be paying rent. Eviction moratoriums aside, landlords need some love from the state and need to be shown the light at the end of the tunnel. You must pair up some of the ... initiatives with ways to help get cash flowing to landlords again, especially those that own retail spaces.”