How To Quickly Process 5K+ Applications For $50M Bridge Loan Program
Hartford Business Journal, April 9, 2020
By Greg Bordonaro
The state Department of Economic and Community Development received more than 5,000 applications within 48 hours of its emergency loan program going live last week, and now the agency is trying to figure out how to dole out $50 million to eligible borrowers by the end of this month, an official said.
Processing that many loan applications is a huge challenge and DECD and Connecticut Innovations -- the state’s quasi-public venture arm -- can’t handle it on their own if they want to get the money out quickly to businesses starved for cash amid the coronavirus pandemic, which has shut down significant parts of the economy, said DECD Commissioner David Lehman.
Lehman said his agency is in talks with potential tech-enabled lenders to help process, underwrite and eventually disburse the $75,000 loans to eligible companies.
A partnership could be announced by the end of this week, with the goal to get the $50-million pool disbursed by the end of April, he said. “We are trying to figure out what is the most automated and efficient way to get this money out,” Lehman told HBJ Wednesday morning.
allotment doubled back to top
The loan program originally had only $25 million allocated, but that amount was doubled after it was inundated with applications.
The program allows a maximum loan size of up to $75,000 and loans carry a 0% interest rate.
DECD and Connecticut Innovations did add additional staff to process applications for the loan program, but there is a need for a more automated system, Lehman said.
To qualify for the loan program, eligible Connecticut businesses must have 100 or fewer employees and have been profitable prior to March 10, with no adverse personal credit reports 60 days past due for the last six months. Borrowers must make personal guarantees for the loans, and a credit score is required. In addition, no real estate, multi-level marketing, adult entertainment, cannabis or firearms companies will receive the loans, DECD said. The loans will have a term of 12 months, with the possibility for a six-month extension.