NEW HAVEN, Conn. (WTNH) — The City of New Haven is partnering with a number of funders to help minority and women-owned businesses. The loan program is aimed at those hit hard in the down economy caused by the Coronavirus pandemic. But will it be enough?
Divy Geli is Philipino and has owned Phil’s Salon and Spa in New Haven for nearly five years. He has six employees, but work is slow and he can’t get the federal Paycheck Protection Grant.
Geli says he called five banks with no luck: “I asked the Key Bank which we work with them; I asked People’s Bank they said we are not allowed to get the PPG from them [because] we are not doing business with them.”
To fill that void, the city is joining forces with the Community Foundation for Greater New Haven, HEDCO, and Amour Propre Fund to loan up to $1.5 million to women and minority-owned businesses. The average loan is $25,000.
New Haven Mayor Justin Elicker says the region is suffering: “What COVID has highlighted is the severe inequities which are being experienced by the Black and brown communities.”
Lyndee Gold of the Amour Propre Fund gave some startling statistics from the Center for Responsible Lending. She said, “It’s predicted that up to 40% of women and minority businesses will not survive the losses.”
To qualify, businesses must meet these benchmarks:
- No more than 20 employees
- 51% minority/woman ownership
- New Haven/ Naugatuck Valley based
- In business for at least one year
- Don’t owe taxes
Kim Hawkins of HEDCO inc. describes the details of the loans: “It’s a 4% loan program which allows them to be able to use these dollars for working capital to purchase inventory.”
Governor Ned Lamont says, “Programs like this provide a lifeline to companies who otherwise don’t get access to Paycheck Protection Program.”
It’s estimated that 70 local small businesses will be helped.
Will Ginsberg, Executive Director of the Greater New Haven Community Foundation admits it’s a small pool of money but says, “we think it will make a big difference.”
Even so, Geli may not be one of them. He can’t afford the terms of the loan.
“We are trying to survive,” the says.
The first year of the loan is interest-only. If you are in good standing you could be forgiven up to 16% of the loan. To find out more or apply visit here.