New Britain offers interest-free loans to small businesses in low-income neighborhoods – Hartford Courant

Seeking to help struggling small businesses and tackle high unemployment, New Britain is offering low-interest loans in targeted, low-income areas of the city.

Small restaurants, nail salons, hair salons, and similar neighborhood businesses can get $7,500 loans to buy new equipment, install or upgrade security systems, or improve their storefronts and signs.

If a company that receives a loan maintains or increases its payroll levels for five years, the loan is converted into a grant and is cancelled.

“It’s not meant to help big manufacturers – the need is for our corner store, the bakeries,” Mayor Erin Stewart said. “One of the companies that will be applying is a small appliance store.”

The city this week began accepting applications for its new micro-grants program, an effort that will start small but gain increased funding if it proves very popular, Stewart said.

The city will publish the names of the companies once the selections have been made. Officials said Monday afternoon that a local laundromat was the first claimant.

To be eligible, businesses must be in one of New Britain’s low-income neighborhood revitalization areas: East Street, Arch Street, North/Oak or Broad Street.

“According to the guidelines, ideally it should be a neighborhood service business – neighborhood grocers, restaurants, small businesses that serve a local market,” said Jack Benjamin, director of planning and development for the town.

The city is budgeting $75,000 for the first year and will award awards in two cycles: now through September, and again in the spring.

The Biden administration has pumped more federal aid into cities and towns during the pandemic, allowing New Britain to redirect some housing and urban development money to micro-grants.

“We’re going to use HUD funds to directly benefit small businesses that have a handful of employees and are going to maintain employment,” Stewart said. “They just need a little push. We have received requests from so many small business owners since the pandemic asking for help. »

Benjamin and Stewart said $7,500 can mean a lot to a small business that pays rent and payroll but struggles to pay for any business improvements.

The micro-grant is for these businesses to purchase or upgrade surveillance cameras and burglar alarms, or perhaps replace expensive equipment for their operations.

The other goal — signage — can benefit the whole block, Benjamin said.

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“A byproduct can be a bit of neighborhood beautification,” he said Monday. “There are a lot of places that are ripe for new signs.”

Businesses must provide financial statements, copies of their lease or deed, credit report and other documents.

Each year after receiving the loan, they must provide proof that they have maintained or increased their level of employment. Each year, 20% of the loan will be forgiven, until the full amount is canceled in five years.

New Britain’s unemployment rate in July was 6.5%, among Connecticut’s half-dozen highest. Preserving existing jobs in poor neighborhoods — and perhaps adding new ones — is key, Stewart said.

“For people in customer service-oriented jobs, it’s especially difficult because more and more of those jobs are no longer available,” she said. “We know a lot of people are struggling to make ends meet.

“And our social services office has seen an influx of people looking for help navigating the hiring process. Sometimes people work at a neighborhood business for years; it closes and they don’t have had to pass a job interview before.

Don Stacom can be reached at [email protected]

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