It’s certainly an understatement to say that Spring of 2020 has not gone how anyone had planned. With the outbreak of COVID-19, also known as the coronavirus, hitting the United States in early March, it’s safe to say that no one could have been prepared for the impact this virus would make on the economy or moreover…the world.
In an effort to help support and alleviate some of the negative effects that COVID-19 has had on small businesses throughout Connecticut, the state government has recently released a new loan relief program. The Connecticut Recovery Bridge Loan Program will allow small businesses access of up to $75,000 or 3 months of operating expenses and will allow them to pay that amount back over 12 months at 0% interest.
Here’s some good news: Insurance for pandemic-proofing your restaurant is closer than you think!
Who Is Eligible For This Program?
In order to quality for this program, the small business or nonprofit must meet the following list of criteria:
- The business must have no more than 100 employees
- The business must be in good standing with the Department of Revenue Services & DECD
- The business must have been profitable prior to March 10, 2020 and cannot have any adverse personal credit reports 60 days past due in the past six months
- The business must not be involved in real estate, multi-level marketing, adult entertainment, cannabis or firearms; nor can it be a state elected public official or a state employee
The Finer Details Of The Loan
The program will only allow businesses to receive a maximum of $75,000 or three months of operating expensese, whichever is less. This means that if your operating expenses for three months are only $65,000 then you will only be allowed to take out a loan for $65,000.
As we mentioned earlier, the interest rate on this loan is 0% with a 12 month term, however there is a 6 month extension available by request. Connecticut did mention that this program is freely pre-payable and is a working capital loan, and that your personal guarantee and credit score would be required.
What Would I Need To Apply?
In order to apply for the Connecticut Recovery Bridge Loan Program, you must complete an online application, which is available here.There are additional documents that you will need to gather prior to your application.
These items include the following:
- Project Financing Plan & Budget
- Your 2019 Income Statement or Profit and Loss Statement
- Year to date Internal Financial Statements
- A three month projected cash flow that demonstrates the need for this loan
- A summary of adverse economic impact resulting from the COVID-19 virus
- A recent credit score report
- Applicant Structure Documents
- Your personal financial statements
- A breakdown of the ownership of the business
- A DRS Letter of Good Standing
Overview of the Process
Upon completion of the application and gathering your required documents as listed above, the state has requested that all documents be submitted via email to decdctrecovery@ct.gov. From there, if your loan is approved, the DECD will contact you and issue you a Letter of Intent that will outline all of the terms of the loan as well as the amount you will receive. They will then work with you to execute a Standard Assistance Agreement and ask you to complete ACH paperwork so that the funds can be quickly transferred to you by wire.
The DECD hopes that this process will be fully completed within 30 days, but has warned that the timeframe could potentially extend out to 45 to 60 days, depending on the demand. For more information, click here to visit the official program website.
In Conclusion
At Paradiso Insurance, we want to see our commercial clients succeed, and during these trying times we will do our absolute best to keep everyone informed of the benefits and programs that they have available to them. We hope that this information will prove beneficial and that all small businesses who are in need will be able to have access to these funds. Together we will get through these difficult times and forge ahead as a stronger community and country.
For any questions in regards to your current policy or if you are new to Paradiso Insurance, give us a call at 860-684-5270. Our team is here to help in any way we can.
