The failure of the Thirty5 Bar & Grille in West Hartford has drawn greater scrutiny of a state program designed to spark business development.
The restaurant got $47,500 in Small Business Express grant money from the state before it opened in October of last year. The restaurant is closed already, a high-profile failure in a $50 million yearly program of grants and loans that the Malloy administration has touted as one way to get the economy moving again. Whether the state should be investing in restaurants is a question.
Yet the Department of Economic and Community Development, which runs the program, has made a vigorous, and justified, defense of its actions. It said that 689 small businesses have gotten money since the program started last year. Of those, just four businesses closed.
"We knew going in that not every business would make it," Commissioner Catharine Smith said. "We turn away about 40 percent of small businesses that apply for the program. That should keep our problem loans to a minimum," she said.
According to the department, the program has helped retain more than 6,700 jobs, and helped create nearly 2,400 jobs in the state -- although, truthfully, it will take another year or two to accurately measure job growth. Along the way, a few failures are inevitable. Commissioner Smith believes that the program will pay for itself in loan repayment and job growth, and we hope that she's right. It's a worthwhile program. Hopefully it's attracting more high-tech innovators than eateries.
There's one issue, though, with the Small Business Express Program that the department should address before it continues much longer. The overwhelming beneficiaries of the loans or grants are for white, male-owned businesses. Just 6 percent of the small businesses awarded state money so far are minority-owned. Twelve percent are owned by women.
Incredibly, the state doesn't keep a complete, accurate and up-to-date record of minority- and women-owned businesses in Connecticut. The most recent statistics are from the U.S. Census Bureau and date from 2007. Those statistics showed that women owned 29 percent of all Connecticut businesses and that minorities owned 13 percent of the state's businesses.
Women and minorities deserve to benefit in greater numbers from this creative state program. The department should double its outreach efforts in that regard.
Reprinted with permission of the Hartford Courant.
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