Hartford Business Journal

26 HARTFORDBUSINESS.COM | September 12, 2022 ating leases, she said. "I really highly doubt the SBA will extend out the deferral any longer, especially since they already extended the deferral in March for another six months," Blacik said, noting the failed effort in Congress to replenish the $26.8 billion Restaurant Revitalization Fund. U.S. Rep. John Larson (D-1st District) in a state- ment said his office is working with small businesses "stuck in the EIDL and Restau- rant Revitalization Fund" queue. More than 100,000 restau- rants across the country missed out on assistance, Larson wrote. The congressman supported a failed attempt earlier this year to recharge the Restaurant Revitaliza- tion Fund with $42 billion. A useful lifeline Allan Nguyen, owner of Lily's Nails of New Britain, said a $150,000 SBA loan saved his five- year-old business. It is still recov- ering, but Nguyen has already begun repaying his debt. "After you were closed for three months, you're back on rent, back on a lot of stuff," Nguyen said. "Without that, I didn't think I could hold through." Michael Lassy, co-owner of Mastercraft Tool & Machine Co. in Southington, said a $150,000 EIDL loan allowed him to keep his 54-year-old tool and die shop's 21 employees working even after customers pulled back parts orders due to labor shortages and other challenges. Lassy said he used the time to build up inventory, which is now beginning to thin out to normal levels. Lassy wanted to keep his staff employed for their sake and his own. Replacing trained manufacturing help is extraordinarily difficult. It was better to hold onto staff rather than hope they would return following layoffs. Lassy started paying down his loan about a year ago, he said. Some borrowers just held onto the money for a rainy day, but never spent it. James Galvin, owner of Rizzo Pools in Newington, said he took a $140,000 EIDL loan "just in case," but hasn't needed to tap the money and will simply return it. Rozalynd Koba said she borrowed $9,000 for her Durham massage therapy business at a very uncertain time. Her husband, a chef, had been out of work for about eight months. Her business was temporarily closed. Their child was eight months old. "I took it out, but it was advised to me by my bank to keep it in the account as an insurance policy," Koba said. "I just held onto it and paid mine back in full last month." Attractive offer, but clearly a loan Catherine Marx, director of the Connecticut District Office of the SBA, said the low rate and long repayment period made the EIDL loan an attrac- tive tool. Rates of 3.75% for business loans and 2.75% for nonprofits are "unheard of," Marx said. "Every single day I could give you a number of different businesses I know that without COVID working capital would not be in business," Marx said. Marx said the SBA made it clear from the start that Economic Injury Disaster loans would have to be repaid. Even so, the agency is working to reinforce the message. "We are doing outreach to work with businesses, so they understand that they are coming due and they are going to need to go in and start paying them," Marx said. EIDL – like some other COVID-19 relief programs – has been the target of wide-ranging concerns of fraud and poor vetting of applications in the rush to distribute money during the crisis. In May 2021, U.S. Attorney General Merrick B. Garland established the COVID-19 Fraud Enforcement Task Force to coordinate efforts to uncover pandemic-related fraud. In remarks during a COVID-19 fraud roundtable in Washington, D.C., Garland said the Justice Department had seized more than $1.2 billion in relief funds since the start of the pandemic and charged more than 1,000 people with crimes. Concern muted for now While concerns about loan repay- ment may be rising in some corners, it hasn't led to a clamor just yet. Leaders from several business groups, including the Waterbury Regional Chamber and Connecticut Business & Industry Association, said they haven't yet heard EIDL complaints from their members. Bill Slattery, a partner with accounting and financial consulting firm Fiondella, Milone & LaSaracina LLP, said about 50 or more of his clients took advantage of the emergency loans. None have yet returned with worries about repayment. Given the other challenges facing businesses and the SBA loans' relatively generous terms, this new expense might not be high on the list of burdens, Slattery said. "My honest opinion is if you hear an uproar, you will hear it a few months in," Slattery said. "I honestly think it's going to catch people by surprise. I think that's coming down the road for sure. I don't know if it's going to be an uproar, but certainly it's going to be an issue." John Larson Catherine Marx Bill Slattery SATURDAY, OCTOBER 8 HartfordMarathon.com Take on 26.2 miles, 13.1 miles, the 5K or get a team together for the marathon relay!

• Cover