Hartford Business Journal

HARTFORDBUSINESS.COM | JANUARY 22, 2024 11 SBA program. He said he didn't have enough of a down payment for a traditional loan. David Dziob, a principal of New Designz, also said SBA backing unlocked a loan he might not have otherwise secured. "The SBA is one of the reasons we got a loan because the banks were being so tight," Dziob said. Silva said he expects demand for SBA loans to remain strong in fiscal 2024, even with economic headwinds. The typical 10% down payment required by SBA's 504 loan program appeals to borrowers wanting to conserve cash, he noted. Ups and downs The SBA's "flagship" 7(a) loan program had a banner year in Connecticut during fiscal 2023, with 744 approvals totaling $290.4 million. That's up from 636 loans, totaling $234.7 million the prior year, a nearly 24% increase in overall dollars approved. Under the 7(a) program, the SBA guarantees lenders repayment of between 75% and 85% of loans up to $5 million to qualifying small busi- nesses. This program can be used for real estate, construction, debt refinance and working capital. The increase in the 504 program wasn't as impressive. Ninety Connecticut borrowers were approved in fiscal 2023, down from 104 in fiscal 2022. But average loan sizes jumped from $680,625 in fiscal 2022, to $797,011 in fiscal 2023. That led to an overall 1.3% increase in 504 program lending volume to $71.7 million. Acting through Certified Devel- opment Corporations, like CIC, the SBA takes on up to a 40% share of a 504 loan, which can be used for equipment and property purchases. The SBA's share can be up to $5.5 million. Banks carry 50% of the loan and borrowers are typically required to put down 10% equity, but that could range up to 20% under certain conditions. Improved access Buffalo-based M&T Bank was Connecticut's top 7(a) lender in the most recent fiscal year, with 126 loans totaling $18.1 million. M&T has long been authorized to verify borrower eligibility that otherwise would have to go through the SBA, speeding approvals. Christina Smaczniak, director of government lending for M&T, also noted that pandemic-inspired small business assistance programs, like the Paycheck Protection Program, introduced many companies to the Small Business Administration, enhancing its profile. "I believe that's changed the way business owners think about SBA lending, and they are more open to leveraging the program to get access to capital when they are not eligible for conventional credit," Smaczniak said. The SBA's ability in recent years to waive upfront borrower fees for most 7(a) applicants has also likely played a part in increasing use of the program, she said. Catherine Marx, Connecticut SBA district director, said she agrees that pandemic-aid programs helped raise the profile of the federal agency. "The SBA played an oversized role in helping small businesses recover, so there's no doubt that role and that attention to the SBA has helped us in 2023 reach more small businesses, reach more entrepreneurs, so they now look at the SBA first, rather than later," Marx said. Brett Eagleson, vice president of commercial real estate for Rhode Island-based The Washington Trust Co., said he's seen a big improvement in the marketing and processing of SBA loans. Speedier and easier approvals have increased the appetite of bankers, in addition to borrowers, he said. "I think in the past, dealing with SBA and the federal government wasn't always the easiest thing to do," said Eagleson, whose bank has $7.2 billion in assets. "It was a lot more cumbersome. But the SBA has improved dramatically on that." Eagleson said Washington Trust is eager to participate in 504 program loans because SBA shares the risk, and it allows the bank to develop new client relationships. Borrowers tend to migrate other accounts to banks participating in their SBA loans, he said. Walker said she moved Sallyz Center for Autism's business accounts to New Valley Bank because of the positive experience with her 504 loan. The new South Windsor building is roughly seven times as large as the location Sallyz leased in a nearby retail plaza. Walker spent about $250,000 on repairs, renova- tions and furnishings. The first two of three floors have been repainted in comforting hues of light green and blue. A new mural depicting children walking a path in a rural landscape fills one wall of a first-floor hallway. Sallyz started operating in its new space in November. "It's been going great," Walker said. "The kids and parents are loving the new space. It's a beautiful space. It's a beautiful building." Brett Eagleson Christina Smaczniak Catherine Marx $400M $350M $300M $250M $200M $150M $100M $50M $0 2019 2020 2021 2022 2023 TOTAL LOAN VOLUME* Connecticut SBA lending totals *Includes 7(a), 504 and microloans. | Source: U.S. Small Business Administration Former Wethersfield Town Council member Pentalow named Hartford's economic development director By Michael Puffer mpuffer@hartfordbusiness.com H artford Mayor Arunan Arulampalam has named former Wethersfield Town Council member Patrick Pentalow the city's new economic development director. He was appointed on Jan. 2. Arulampalam said the two were introduced by mutual acquaintances that he respects, and that Pentalow was "really involved" in attracting business to Wethersfield in his role on the town council. "I was impressed by his track record, impressed by his knowledge and private-sector experience," said Arulampalam, who was sworn into his first term on Jan. 1. Pentalow, 33, grew up in Wethers- field, where he currently resides. He is house-hunting in Hartford. He graduated from Central Connecticut State University in 2014 with a degree in accounting and finance, then took a job with New York venture capital firm Centurion Holdings. Pentalow went to work as a financial advisor with Morgan Stanley in 2018, but left the following year to focus on his ultimately successful 2019 bid for a seat on the Wethers- field Town Council. He said he spent his time as a GOP member of the council focused on economic development, but did not stand for reelection this past November. In 2020, Pentalow ran as a Repub- lican for state representative in the 28th House district, which covers most of Wethersfield. He came in second among four candidates, collecting 42.7% of the vote. Pentalow said he launched a title search company after leaving Morgan Stanley and has also worked temporary consulting jobs. He said he views his new role as one of customer service, helping residents, businesses and developers. Pentalow plans to execute Arulampalam's vision of continuing to push for downtown vibrancy, while also directing more energy toward revitalizing main arteries connecting neighborhoods to the city center. He also agrees with Arulampalam's drive to make City Hall more accessible for business people. Pentalow is among several key appointments that have been made by the new mayor. Former Director of Development Services I. Charles Mathews resigned Dec. 23, during the last days of the Bronin administration. Deputy Director of Development Services Randal Davis has stepped in to lead the department on an interim basis. Arulampalam moved Judith Roth- schild from the position of director of Patrick Pentalow blight remediation and housing code enforcement to the role of director of licensing and inspections. Blight Remediation Enforcement Official Michael Perez has been promoted to lead that department. Arulampalam hired Matthew Straub, formerly a senior program officer with the neighborhood revi- talization and community organizing nonprofit Local Initiatives Support Corp., as the city's new housing director. He replaces Brian Matthews, who left city employment Dec. 23. Finally, Don Chapman, a veteran planner with two decades of experi- ence in City Hall, has been named director of the Office of the Business One-Stop, a newly created role intended to help small businesses navigate city bureaucracy, including the permitting process. The Business One-Stop office will be located within the Department of Development Services, allowing close access to relevant staff. Chapman, who for years worked for the city as a senior and principal planner, will report directly to Arulampalam.

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