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The highly anticipated April 3 launch of the federal government’s $350 billion small business stimulus program experienced a number of glitches and delays, but nearly a week later it’s clear Connecticut companies’ loan applications are being approved and money is going out the door.
Nationwide, 400,000 Paycheck Protection Program (PPP) loans have been approved worth more than $100 billion, according to the U.S. Small Business Administration, which is overseeing the program designed to help put money directly into the hands of small businesses and nonprofit organizations with fewer than 500 employees affected by the COVID-19 coronavirus outbreak.
The Connecticut Business & Industry Association (CBIA), the state’s largest business lobby, is surveying its members to determine how many applied for stimulus funds, how many were approved and to learn more about their experience with the application process. CBIA on Thursday said it's distributed 500 surveys to a representative sample of more than 5,000 member companies.
Early results, as of day’s end Tuesday, showed that 274 of 300 respondents applied for federal funding and 74% of those members were approved for PPP loans. The loans are capped at $10 million.
CBIA CEO Joe Brennan said he was surprised that 36% of respondents said the application process was “satisfactory” because many reported frustrations with online registrations and lending institutions.
According to the SBA, nearly 1,300 Connecticut small business loan applications valued at $640 million had been approved by Monday morning, but the agency hasn’t provided updated statistics since then. Local bankers say they are seeing significant loan application volume.
Naugatuck-based Ion Bank says it just recorded its busiest few days in its 150-year history.
Although many businesses are still unsure when they will receive funds, Brennan says they are largely planning to use the money on payroll and eligible operating costs, like rent and utilities, to maintain employment levels so they are ready to kickstart operations when the economy ramps up in the coming months.
“Everybody feels their situation is one that’s critical,” Brennan said. “That’s why we are hoping there will be enough capital behind this to get us through the short term.”
Brennan, who plans to retire later this year, said he’s hoping the federal government will inject additional funding into the PPP. That, he added, would provide significant relief for Connecticut companies in addition to a $50-million bridge loan program being run by the state Department of Economic and Community Development.
According to CNN, the White House and congressional Republicans are working to approve $251 billion in additional funds for the program by the end of this week.
“The big question is ‘what will be the next level of support?’ ” Brennan said. “The states just don’t have the resources to keep the economy going. That’s the primary thing right now.”
Technical glitches and lender frustrations began during last Friday's rollout of the PPP.
“Immediately that anticipation turned into frustration,” said Andrew Markowski, state director of the National Federation of Independent Business (NFIB) in Connecticut. “Small business owners are generally people of action. Many of them were ready to go with applications, documents and patchwork, and ran into a series of inconsistencies.”
Several NFIB members in-state have been struggling to find a bank that will accept their loan application as they pursue low-interest stimulus funds that are forgivable if employers adhere to various rules, Markowski said. The denials have come as many banks are prioritizing applicants who have an existing loan, credit line, or checking/savings account with the financial institution.
“That caught some people off guard,” he said. “It’s a case-by-cases basis -- I can’t seem to find a uniform approach to what [financial institutions] are doing.”
Markowski has been informed of at least one bank that was unable to process loan applications when the stimulus program launched because they were already inundated with pre-application requests.
Meantime, some banks say the SBA as of Tuesday has not provided them with the template of a key form needed to close out loans. And the SBA system is asking for loan documentation that lenders didn’t think they’d have to provide.
There’s also been a bottleneck at the SBA due to problems with the agency’s “E-Tran” system that banks must use to authorize the loans.
“You have to give everyone credit here to some extent,” Markowski said. “This is a massive program that the federal government put together very quickly” and forced financial institutions to update their own systems and processes. “Arguably, there are going to be some hiccups.”
Brennan agreed that early troubles with the stimulus program -- part of the massive CARES Act signed into law last month -- were inevitable due, in part, because of high demand.
“We knew this was going to happen just because virtually every business I talked to is interested in the federal program because it’s forgivable loan if you use it for payroll, rent/mortgage and utilities,” he said. “We are doing the best we can with this. We are kind of at the mercy of the system here.”
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The Hartford Business Journal 2025 Charity Event Guide is the annual resource publication highlighting the top charity events in 2025.
Hartford Business Journal provides the top coverage of news, trends, data, politics and personalities of the area’s business community. Get the news and information you need from the award-winning writers at HBJ. Don’t miss out - subscribe today.
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