Mixed Response to Announced $50 Million in Funding for Small Businesses

Today’s announcement of Gov. Ned Lamont’s small business relief program received mixed responses from business associations, some welcoming the funding, while others argued that it is not enough to help the many small stores and restaurants that have lost revenue from the COVID pandemic.

Lamont announced $50 million in CARES Act funding to be given out in the form of $5,000 grants to 10,000 small businesses across the state. To qualify for the funding, a business must have 20 or fewer employees or a 2019 revenue of $1.5 million or less. 

The program falls short of the $70 million in CARES Act funding requested in a recent letter to the governor from business interests, which also asked that program include businesses with 50 or fewer full-time employees. 

Scott Dolch, president of the Connecticut Restaurant Association and the main author of the letter, responded to the governor’s announcement with a statement. 

“The program announced today, while well intentioned, simply won’t do enough,” Dolch said in a statement. “We need as many small businesses as possible to stay in business so they can be part of our economic recovery in 2021.”

Other leaders in the business community, however, welcomed the announcement. 

Tony Sheridan, president of the Eastern Connecticut Chamber of Commerce, said the program could be a source of relief for the majority of the businesses that fall under the chamber’s jurisdiction. 

“I think it’s wonderful, I think it’s overdue,” he said. “It’s not a lot of money per business, but there’s no question it’ll be helpful.” 

Eric Gjede, vice president of government affairs at Connecticut Business Industries Association, said he was grateful to the governor for providing some relief to the smallest businesses. However, he said that he hoped this program would be followed by something more expansive. 

“It’s good to see they are taking our call for help seriously,” he said. “Let’s hope they are planning more.” 

In Need of Relief

Dolch told the Connecticut Examiner that with the cold weather approaching, restaurants were concerned about what business would look like for them in the coming months, especially as the funding they received from earlier programs runs out. 

“I’m seeing restaurants closing every day,” said Dolch. 

And restaurants are not the only businesses in need of relief. The letter had signatories representing retail, events venues, manufacturing, tourism, grocery stores and motels. 

“We wish we didn’t have to ask for this funding right now,” said Eric Gjede, vice president of government affairs at Connecticut Business Industries Association, one of the letter’s signatories. Gjede said that the association had hoped for additional federal funds for small businesses, but that right now those “appear to be in gridlock.” 

Tim Phelan, president of the Connecticut Retail Merchants Association, another signatory, said he knew of certain retail businesses that have also struggled to remain afloat. 

Dry cleaners and clothing stores, for instance, are under pressure — working from home has meant that fewer people need to buy business clothes. And businesses that rely on tourism could be poised to lose money as the season changes. 

Phelan said that consumer confidence is a big concern. He thinks people may become more hesitant to go out shopping as coronavirus cases rise and the weather becomes colder. 

“These are viable businesses that need to remain strong during this time,” he said. 

Even larger businesses that wouldn’t qualify for the funding would benefit from the economic stimulus it would bring. Bob Murdock, president of the Connecticut Convention and Sports Bureau, said that people who come in for events frequent small businesses.

Regional Comparisons

The governor’s program will provide a grant of $5,000 to 10,000 businesses. In total, 50,000 businesses around the state qualify for the program, employing a total of 350,000 individuals. The program also requires that half the grants go to businesses located in Connecticut’s 24 distressed municipalities.  

Glendowlyn Thames, deputy commissioner of the Department of Economic and Community Development, explained the decision to keep the grants to $5,000 apiece.  

“It was really, how could we efficiently and most simply provide grants to as many businesses as possible that have been hardest hit,” she said. “$5,000 was a really good number to get 10,000 businesses funding.” 

At the press conference, Lamont expressed frustration with the federal government’s delay in providing a small business relief package. 

“We need the Senate to step up. We need the president to step up,” he said. In the meantime, the governor said, he hoped the funding could provide “a bridge” to help businesses survive through the next months. 

Connecticut is not the only state drawing on its CARES funds to give small businesses a boost. 

In his response to the governor’s grant program, Dolch pointed out that other states had created grant programs for small businesses that provide more funding and extend to a wider subset of businesses. 

New Jersey governor Phil Murphy, for example, announced last Tuesday that he was allocating $70 million in CARES funding to help businesses of 50 or more full time employees.  

Rhode Island has provided $60 million in funding for small business grants of up to $30,000 each for businesses with 50 or fewer employees that demonstrate a drop of at least 30 percent in revenue between March and July of 2020, in comparison with the same months last year.  

Massachusetts, New Hampshire, Delaware, Vermont and Maine have also created small business relief programs using CARES funding. The money allocated ranges from $100 million to a total of $500 million. 

Businesses in Connecticut can submit applications beginning the week of November 9. Those that qualify should receive the funding by December 30. 

“I really hope that this is going to be a bridge,” said Lamont. “Not a bridge to nowhere, but a bridge to the backside of this pandemic.” 

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