Efforts to help minority-owned small businesses in Connecticut could be challenged at the end of this month, as federal funding threatens to run dry for business development programs.
In a March executive order, the Trump administration unilaterally ordered the federal Minority Business Development Agency (MBDA) “eliminated to the maximum extent consistent with applicable law.”
That resulted in an email to hundreds of programs around the country grant funded by the agency, including in Connecticut and New England.
“The email we got on April 17th terminating the grant was a pretty bitter pill to swallow,” said Peter Hurst, president of the Greater New England Minority Supplier Development Corp. “We have consistently exceeded all of our metrics. And the metrics are not focused on soft stuff.”
Over almost four years of a five-year, $2 million grant from MBDA, Hurst’s organization has served 547 businesses in New England, completing almost a thousand capacity-building assignments, and helping those client businesses raise more than $1.6 billion in capital.
He says that effort has maintained or created some 2,847 jobs.
“You can clearly see how those metrics help those businesses make a positive economic contribution,” he said. “The contribution is important because there’s a racial wealth gap that exists in this country, and minority businesses – all diverse businesses – are really an effective lever to reduce the racial wealth gap.”
In Connecticut, an innovative new center helping minority-owned advanced manufacturers was similarly cut off.
Administered through UConn, the center was established in 2021 with a $2 million, five-year grant from the MBDA. It’s one of four in the country — the others are in Texas, Kentucky and Maryland — and its purpose is to serve not just advanced manufacturers in Connecticut, but anywhere around the country.
“One of our key partners is actually the Manufacturing Extension Program in Puerto Rico,” said Joe Ercolano, the program director. “We were really getting some traction.”
He estimates that since the center was established, it has helped some 425 companies, around a quarter of them in Connecticut.
“A lot of people are interested in contracting opportunities, going after contracts with public or private sector buyers, and so a lot of the focus was on that,” Ercolano said. “But we also do a lot on financing, helping them finance growth, buy equipment, prepare contingency plans for disaster planning – a very big topic in Puerto Rico, but also important up here as well.”
After the ax fell in April, attorneys general in several states, including Connecticut, sued the administration over the cut, and in May, a federal district court issued a preliminary injunction requiring the administration to reverse its actions to eliminate the agency.
That provided Ercolano and Hurst’s organizations with a brief reprieve, safeguarding their funding until the end of the program year in June. But the final year of their five-year grant period remains uncertain, dependent on the budget bill currently making its way through Congress.
“Congress provides our appropriation, but the administration, in their budget, zeroed out MBDA,” Ercolano said.
The House of Representatives has passed the president’s budget bill, which would formalize the end of the agency.
“How far will the Senate go to push back and say, we think there should be an MBDA?” Ercolano asked. “I can’t guess.”
The Center has already let go its two employees, in anticipation of an end to its funding, and says it may even have difficulty providing final reports, as the customer relationship management system it was using has been shut down.
Democratic lawmakers have been fighting to reinstate funding for the programs. Sen. Richard Blumenthal has signed onto an appropriations letter that asks for $110 million in the new budget for the MBDA. His office says he’s monitoring the situation and stands ready to support organizations in Connecticut that are impacted.
Hurst, meanwhile, says he will fundraise through other grant opportunities and in the private sector to keep the work of his office going.
“We think it’s that important,” he said. “I’m going out to get the money from somewhere else. We don’t want to lose the momentum. I’ve got a good team in place and I don’t want to lose their effectiveness. So, we’re going to find the money and keep doing it.”
