DECD gets raves for service — and cheap capital
What does it take for a state agency to produce dozens, if not hundreds, of happy small-business owners in Connecticut, a state not known as business friendly? Quick service and responsive employees help — and $67.2 million in no-cost or low-cost capital certainly doesn’t hurt.
For nearly an hour Thursday, about 30 small business owners praised the administration of Gov. Dannel P. Malloy for doing what banks had refused in the past year: providing capital to expand in a weak economy.
There was Virginia P’an of Yumi EcoSolutions, the maker of biodegradable products that replace plastics. She said a $250,000 loan and $100,000 grant are allowing her small Fairfield County company to supply national retailers like Williams Sonoma.
William R. Gay of ImageFirst said he chose Farmington as the site for his growing medical laundry business over locations in New Hampshire and Rhode Island because of the responsiveness of Farmington and state officials.
Marcia LeFemina of Pennsylvania Globe Gaslight, a North Branford manufacturer, called her company the “poster child” for economic development as a beneficiary of a $100,000 grant and help hiring ex-offenders and others.
Their companies were among 494 small businesses receiving financial assistance in the first year of the Small Business Express program, a product of the bipartisan special session on jobs in 2011.
Through the end of 2012, the program had made $27.5 million in grants and $39.7 million in loans, with another $38 million tentatively set to go to another 271 businesses.
Expect to hear Malloy seek funds to continue the program after the legislature convenes its 2013 session on Wednesday.
“I will ask the General Assembly to stay the course,” Malloy said.
Under the Malloy administration, the Department of Economic and Community Development and its commissioner, Catherine Smith, have won strong reviews as a customer-friendly state agency.
The governor was told that the DECD rapidly walked the businesses through an application process that was painless, at least until the lawyers got involved. Several business owners called the closing process cumbersome and expensive.
Smith said the department was working on simplifying the closing procedure.
Malloy said the roundtable discussion was encouraging, but he would ask DECD to conduct a similar conversation with an audience that might not be so happy — the 452 businesses whose applications were denied.
Smith said her department required only a one-page business plan, but some applicants could not show sufficient cash flow to qualify for a state loan. Others owed back taxes to state or local governments.
To qualify, companies must have been registered to conduct business for at least 12 months and they must be in good standing with all state agencies, particularly the Department of Revenue Services.
“That’s really the first screen we do,” Smith said.
State officials say the program has “impacted” more than 6,300 jobs, with 1,738 to be created and 4,616 to be retained as a result of the financial assistance, which has leveraged about $40 million in private investments.
“It’s loosening to some degree,” Smith said of the credit market. “If the state puts in a little money, it gives them more confidence.”
Smith said the program was meant to be temporary, but she believes the legislature should appropriate $50 million in each of the next two years for similar aid to small businesses. The original two-year commitment was $100 million.
Sign up for CT Mirror's free daily news summary.
Free to Read. Not Free to Produce.
The Connecticut Mirror is a nonprofit newsroom. 90% of our revenue comes from people like you. If you value our reporting please consider making a donation. You'll enjoy reading CT Mirror even more knowing you helped make it happen.YES, I'LL DONATE TODAY