Connecticut Small Business Coronavirus Relief Bridge Loan Program
In response to the coronavirus (COVID-19) outbreak, Connecticut implemented the Connecticut Recovery Bridge Loan Program (the “Program“). This $ 25 million short-term emergency loan program will be allocated on a first-come, first-served basis. The program will be administered by the Ministry of Economic and Community Development (“DECD”) And expedited with administrative and underwriting support from Connecticut Innovations. The goal of the program is to provide emergency cash flow relief to small businesses and nonprofits affected by the coronavirus.
Program terms and conditions
The program is set up to provide working capital loans to qualifying businesses and nonprofits (eligibility discussed below) up to (a) $ 75,000 or (b) three months of spending. exploitation, whichever is less. The loan conditions are as follows:
- No administration fees
- 0% interest rate
- The loan must be repaid in full after twelve months in one lump sum payment. A six month extension may be requested and is at the discretion of the DECD
- Prepayable for free
- Personal guarantee and credit score required
- All operating expenses incurred after March 10, 2020 are eligible costs that can be reimbursed with the loan proceeds under the program.
- The funds can be used to pay off credit card debt on behalf of the business or non-profit and accounts payable if the amount does not exceed 25% of the loan amount requested
To be considered for the program, your business or non-profit organization must:
- Have no more than 100 employees
- Be in good standing with the Department of Revenue Services (DRS) and DECD
- Have been profitable before March 10, 2020 – with no adverse personal credit report past due 60 days in the past six months
- Not be involved in real estate, multilevel marketing, adult entertainment, cannabis or firearms; neither be an elected official nor a state employee
- Job creation is NOT a funding requirement
How to register
To apply for the program, qualifying businesses and non-profit organizations must complete the online application form. here. The following information will also be required:
- Project financing plan and budget
- Income statement (or) income statement 2019
- Internal Financial Statements (YTD)
- Projected 3-month cash flow, demonstrating the need
- Summary of the negative economic impact resulting from COVID-19
- Recent credit score report
- Applicant’s structural documents
- Personal financial statement
- Distribution of ownership
- Letter of attestation from the DRS
The request and the information listed above should be submitted to [email protected] as soon as possible. As a reminder, the program is available on a first come, first served basis.
What to expect
Once submitted, the application will go through an underwriting and due diligence process. The goal of DECD is to complete the review process within 30 days of receiving an application. However, due to high demand, the exam may take 45-60 days. If the loan application is approved, the DECD will issue a letter of intent outlining the terms and conditions of the loan, including the loan amount.
A standard assistance agreement between the DECD and the company or non-profit (“Assistance agreement“) will be drafted and ACH documents will be required in order to transfer funds by wire transfer. Profits will be paid in one lump sum. If the DECD approves a request for funding, the company or association is responsible for paying legal fees. DECD incurred to prepare the assistance agreement whether or not a closure occurs. These costs are in addition to the applicant’s legal fees, if applicable. The applicant is required to pay the legal invoice of the DECD prior to release of funds An estimate of these charges will be provided prior to closing.
This program is a great resource for businesses and nonprofits that need help to keep operating in these uncertain times. A qualifying business or non-profit organization interested in the program should gather the required information as soon as possible and submit all documents with its application. Applicants should be aware of the various program costs mentioned above, including the requirement to provide personal security for the loan and to pay DECD legal fees if an application is accepted. A business or non-profit organization should only apply for the Program if it is able to meet these and other requirements listed in Section II above.
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