Small Business Fund Renewal on Horizon

State considers targeting Small Business Express toward niche sectors

 

Connecticut appears set to tap anew its Small Business Express spigot this spring, while redirecting at least some of the flow of funding in the direction of the neediest sectors of the economy.

Early into his first term in office, Gov. Dannel P. Malloy pushed the Small Business Express program through the state General Assembly as a way to help companies secure financing to expand — money they could not otherwise tap in the shadow of the Great Recession.

In Malloy’s hometown of Stamford, 30 companies tallied $4 million in state aid under Small Business Express, promising to add 90 full-time jobs — a 35 percent increase from their previous combined payroll — along with 10 more part-timers. That equates to more than $40,000 per job, or $20,000 annually with Small Business Express contracts typically extending two years.

Marketing communications firm PCI Creative Group got word of the Small Business Express program via the Women’s Business Development Council in Stamford. PCI Creative did not land a grant for the full amount it sought, but it was sufficient to help the company hire two people, expand its services and purchase a new digital press, according to principals Mary Ferrara and Anne Chiapetta.

Chiapetta did not rule out the company underwriting that expansion on its own dime, but said it provided peace of mind to push ahead with confidence.

“We are a very solid, healthy business, and yet it’s very difficult to get those lines of credit you were able to get years ago,” Chiapetta said.

Statewide, about 975 businesses have used the program to get $136 million in commitments from the Connecticut Department of Economic and Community Development, the fund’s administrator. DECD Commissioner Catherine Smith suggested the Malloy administration will seek new funding of about $50 million annually to continue Small Business Express.

With small-business loans rising in Connecticut and elsewhere, Smith said the program will likely evolve to focus more funding on companies owned by women, minorities or veterans; or those located in places like Bridgeport, Hartford or Waterbury where unemployment is higher. PCI Creative was among just 70 awardees that identified themselves as owned by women or minorities (along with Sensory Kids and Torque Technologies in Stamford). A larger number of companies in Bridgeport, however, won funding under the “The numbers are astounding in terms of how many companies have taken advantage of it,” Smith said. “But we’ve got a whole bunch of businesses that don’t know Small Business Express even exists.”

The Small Business Express program was one of several programs Malloy promoted in his first term, including a First Five program for companies that add at least 200 jobs; an array of supporting programs to spur entrepreneurship; and a BioScience Connecticut program to galvanize that sector. Stamford was a major beneficiary of the First Five program, with Charter Communications, NBC Sports and Navigators Group bringing their headquarters there, and Pitney Bowes promising to add jobs while relocating within Stamford. Westport-based Bridgewater Associates initially signaled it would move its offices to Stamford, then scotched the deal amid difficulties securing permission from the city to build on the harbor. With a few First Five slots still available under existing authorization, Smith said the state will not seek additional funding for that program. Joe Brennan, the incoming CEO of the Connecticut Business & Industry Association, said he believes an extension of Small Business Express will be the priority of the administration this winter and spring, while adding CBIA members would like to see cuts in spending to fuel other initiatives such as tax reductions that could increase growth more broadly.

“We’ve always said business incentives are fine but … we need an environment here that is conducive to investment,” Brennan said. “Unfortunately, we have not seen the kind kind of growth we would like to see in Connecticut.”

This article appeared in The Advocate on December 30, 2014.

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