State officials are finalizing the terms of a bridge loan program for Connecticut businesses facing a revenue crunch as they await the release of federal emergency loans or other assistance.
The state’s quasi-public venture and lending arm Connecticut Innovations (CI) will be reviewing and funding the loans, which will be as large as $75,000, with an overall funding commitment of $20 million, CI officials said during a board meeting on Tuesday. Interest and principal payments could also be deferred for a year, officials said. While exact interest rates weren’t discussed during the meeting, state officials during a conference call last week that the loans could charge between 0% and 1%.
Those terms aren’t yet official, as CI and the Department of Economic and Community Development (DECD) were finalizing a memorandum of understanding Tuesday that would greenlight the program, which officials hinted at on a conference call with businesses last week.
DECD would have final approval over all loans, but the agency is leaning on CI to manage the program and assist with underwriting because CI, as a quasi-public agency, doesn’t have to clear certain hurdles with the Attorney General or Comptroller’s office that DECD would have to, meaning the state would be able to get the money out more quickly.
While $20 million would fund 275 loans at $75,000, Philip Siuta, CI’s chief financial officer and chief operating officer, said he expects to receive close to 1,000 applications for the program.
“We will all be very busy with this program,” Siuta told board members.
DECD did not immediately respond to a request for comment and additional information Tuesday morning.
This is a developing story. Check back later for more details.
