The State Department of Community and Economic Development received more than 5,000 applications within 48 hours of its emergency loan program going live last week, and the agency is now trying to find a way to distribute $ 50 million to eligible borrowers by the end of this month. , said an official.
Dealing with these many loan applications is a huge challenge, and DECD and Connecticut Innovations – the state’s quasi-public venture capital arm – can’t handle it on their own if they want to hand the cash quickly to starving companies. money amid the coronavirus pandemic, which has crippled large swathes of the economy, DECD Commissioner David Lehman said.
Lehman said his agency was in talks with potential lenders with technology to help process, secure and potentially disburse the $ 75,000 loans to qualifying businesses.
A partnership could be announced by the end of this week, with the goal of disbursing the pool of $ 50 million by the end of April, he said.
“We are trying to determine what is the most automated and efficient way to withdraw this money,” Lehman told HBJ on Wednesday morning.
The loan program originally had only $ 25 million allocated, but that amount was doubled after it was inundated with requests.
The program allows a maximum loan size of $ 75,000 and the loans carry an interest rate of 0%.
DECD and Connecticut Innovations have added additional staff to process applications for the loan program, but a more automated system is needed, Lehman said.
To be eligible for the loan program, qualifying Connecticut businesses must have 100 or fewer employees and be profitable by March 10, with no adverse personal credit report 60 days past due in the past six months. Borrowers must provide personal collateral for the loans and a credit score is required.
In addition, no real estate, tiered marketing, adult entertainment, cannabis or gun companies will receive the loans, DECD said.
The loans will have a term of 12 months, with the possibility of an extension of six months.