Lamont administration plans to roll out loan program for businesses

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By Paul Hughes, Republican-American

HARTFORD — The Lamont administration is planning to roll out an emergency bridge loan program for Connecticut businesses next week in response to the coronavirus pandemic.

Gov. Ned Lamont and top officials of the Department of Economic and Community Development outlined the planned recovery loan program in a conference call Thursday with more than 2,000 representatives of state businesses.

“That is one of our real priorities for small business to give you at least enough firepower and gun powder that you can power through what is really an unprecedented time for this state,” Lamont said.

He said the outbreak of 2019 coronavirus disease could last from three to nine months.

State officials are looking to offer small businesses interest-free or low interest loans to cover operating costs for three months or so, said David Lehman, the state commissioner of the economic and community development.

“We are focused on rolling that out as soon as possible. It is likely to be early next week,” he said.

Lehman said state officials are discussing providing 0% to 1% recovery loans for 12 or 18 months. In contrast, the U.S. Small Business Administration is offering disaster relief loans at 3.75% for up to 30 years, he said. The SBA is offering nonprofit organizations a 2.75% rate.

Lehman said 80% of Connecticut businesses that have responded to an ongoing state survey expect sales and revenue declines. He said 50% remain open at full capacity, 39% are running at reduced capacity, and 12% are closed.

The Lamont administration already moved to defer loan payments for all Small Business Express loans for three months. The Malloy-era program provides loans and grants tied to job creation and retention targets to qualified businesses with 100 or fewer employees.

The governor’s office estimated approximately $5 million in loan payments will be deferred. The Small Business Express program has approximately 800 outstanding loans of approximately $110 million. The average loan has a remaining term of five years.

The Department of Banking has also issued guidance to state-chartered banks and credit unions on ways to provide relief to small businesses and Connecticut consumers.

Banking regulators suggested banks and credit unions consider offering payment accommodations such as allowing borrowers to defer some payments or extending the payment due dates

In addition, the banking department proposed easing credit terms for new loans, waiving overdraft fees, waiving late fees for loan balances, increasing the number of allowed money market withdrawals, waiving early withdrawal penalties for certificates of deposit.

The department also asked institutions to inform loan servicers and collection agencies of any actions they may take, so consumers and small businesses know all possible accommodations.

“I can’t do it by mandate, but I think we are going to find they are going to be willing partners for each and every one of you over the next six months,” Lamont told business representatives on the conference call Thursday.

The Department of Revenue Services has granted an automatic extension of Connecticut filing deadlines for certain annual tax returns.

The DRS extended the deadline for filing returns for the pass-through entity tax from March 15 to April 15, and tax official pushed back the payment date to June 15. It did the same for the corporation tax and unrelated business income tax returns.

The tax department also advised individuals preparing their state income tax returns due April 15 that it will adjust filing and payment dates to parallel any changes that the Internal Revenue Service announces regarding filing and payment due dates for federal income taxes.