Due to the unprecedented crisis facing our state, the Department of Economic and Community Development (“DECD”) announced its Connecticut Recovery Bridge Loan Program late last night. This first-come, first-serve $25 million dollar short-term emergency loan program is administered by the DECD and provides cash flow relief to small businesses and non-profits.

The Connecticut Recovery Bridge Loan Program provides 0%, 12 month, working capital loans to eligible businesses and non-profits. The maximum loan available is $75,000 or 3 months operating expenses, whichever is less. The loans are due in a balloon payment at the end of 12 months, but may be pre-paid without penalty. A 6 month extension may be granted, upon request, at the discretion of DECD.

To be eligible, a small business or non-profit must have no more than 100 employees, be in good standing with Department of Revenue Services (“DRS”) and DECD, have been profitable prior to March 10, 2020, and have had no adverse personal credit report demonstrating a 60 day delinquency within the past 6 months. The DECD Commissioner has the authority to request collateral to secure any loan provided under this program. A personal guaranty is required. Businesses involved in real estate, multi-level marketing, adult entertainment, cannabis or firearms are not eligible for assistance. State elected public officials or state employees are also not eligible.

Loans received under the Connecticut Recovery Bridge Loan Program may be utilized for salaries and other operating expenses. The loan may also be utilized for company credit card payments and accounts payable so long as the collective total is not more than 25% of the loan funds. Reimbursement of operating expenditures made on or after March 10, 2020 is an authorized expense under this program.

In addition to the application found here, applicants must submit:
  • A project financing plan and budget;
  • A 2019 income statement or profit and loss statement;
  • A 3 month projection of cash flow to demonstrate need for the loan;
  • Year-to-date internal financial statements;
  • A recent credit score summary;
  • A personal financial statement;
  • An ownership breakdown;
  • Applicant structure documents;
  • A summary of the adverse economic impact to the business resulting from COVID19; and
  • A letter of good standing from DRS which can be obtained here.

If requesting a loan to cover payroll, it is recommended that an applicant further supply a detailed account of actual payroll and 3 months projected payroll.

An analysis of the loan application indicates that preference may be given to woman owned businesses, minority owned businesses, veteran owned businesses, international exporting businesses and those small businesses or non-profits that are unable to obtain financing through private lenders or SBA Disaster Loans. It also appears that priority will be given to businesses that are shut down per Executive Order of Governor Ned Lamont.

Applicants are also responsible for the payment of DECD’s legal costs to prepare the contract documents, even if the loan is not funded. Payment to DECD for these costs must occur before disbursement. DECD anticipates a 30-day turnaround period but such timeframe may be extended due to demand.

As always, your Carmody team is here to support you and your business. Should you have any questions or concerns, please do not hesitate to contact your Carmody attorney or a team member below.

Thomas R. Candrick, Jr.
(203) 784-3103; tcandrick@carmodylaw.com

Joseph Dornfried
(203) 575-2621; jdornfried@carmodylaw.com

Matthew H. Gaul
(203) 784-3106; mgaul@carmodylaw.com

Joseph L. Kinsella
(203) 575-2645; jkinsella@carmodylaw.com

Mark J. Malaspina
(203) 575-2625; mmalaspina@carmodylaw.com

Ann H. Zucker
(203) 252-2652; azucker@carmodylaw.com

Wesley D. Cain
(203) 784-3105; wcain@carmodylaw.com

Stephanie E. Cummings
(203) 575-2649; scummings@carmodylaw.com

Kevin G. Palumberi
(203) 252-2692; kpalumberi@carmodylaw.com

Holly G. Wheeler
(203) 784-3158; hwheeler@carmodylaw.com