Citizens Bank, M&T Bank and First Republic Bank have provided some of the initial funding for a new public-private partnership that will offer low-interest loans to Connecticut small businesses and nonprofit organizations.
The Connecticut Small Business Boost Fund will provide flexible working capital to small businesses and nonprofits, particularly those in low-income and historically underserved communities, Gov. Ned Lamont’s office said in a statement yesterday.
“We’re thrilled to launch the Connecticut Small Business Boost Fund, a new collaboration with private sector partners and investors that will provide companies and nonprofits the working capital they need to grow and thrive,” Lamont said in the statement. “This fund was established to support small business owners who may have previously experienced barriers to accessing financial support and works with and through community lenders that are dedicated to equitable lending practices.”
The loans, which will range from $5,000 to $500,000, have a fixed 4.5 percent interest rate and are available to eligible small businesses and nonprofits operating in Connecticut with 100 or fewer full-time employees and annual revenues of less than $8 million.
The state has invested $75 million into the public-private partnership, which looks to lend at least $150 million. The goal is for the fund to become self-sustaining as more private funds are invested, the governor’s office said, adding that the lending model has previously been used in California, New York and Washington state.
The lending will be made through community development financial institutions, including Ascendus, Wallingford-based Capital for Change, Hartford-based HEDCO, NDC Community Impact Loan Fund, Pursuit and Southeastern CT Enterprise Region (SeCTer). Program applicants will be matched with a lender, the statement said.
The National Development Council will administer the program with funding arranged by Calvert Impact Capital. The state funding for the loan program was made through the Connecticut Department of Economic and Community Development.
“We consider this program to be a one-stop shop for small-business owners,” DECD Commissioner David Lehman said in the statement. “What separates the Connecticut Small Business Boost Fund from other loan programs is that it offers support and guidance services, in addition to the financial assistance, that helps put recipients on the path to success.”
Buffalo-based M&T Bank, which acquired Bridgeport-based People’s United Bank in April, provided initial funding to the program.
“At M&T we recognize that small businesses are the backbone of our local economies, especially in underserved and diverse communities,” Michael Weinstock, M&T Bank regional president for Hartford, said. “That’s why we’re proud to be joining the Connecticut Small Business Boost Fund to support small businesses and nonprofits that too often lack access to affordable, flexible credit. Our focus as a community bank has always been on providing resources that financially empower our customers. This partnership is another important action we are taking to further that mission.”
Also providing initial funding were California-based First Republic Bank, which has a branch in Greenwich, and Providence-based Citizens Bank.
“As part of Citizens’ Economic Opportunity Funds initiative, this effort will harness the bank’s resources to help drive real and lasting progress for small businesses and nonprofit organizations in the Connecticut community,” Reza Aghamirzadeh, head of community development at Citizens Bank, said in the statement. “Creating access to capital and thus improving opportunity for those in the communities we serve represents a further step toward achieving necessary change in a way that aligns strongly with our values.”