The State Bond Commission authorized borrowing $2 million Friday to give to the Hartford Economic Development Corporation (HEDCo), so it can expand support for minority-owned construction businesses that have trouble obtaining surety bonds.
to the Hartford Economic Development Corporation (HEDCo), so it can expand support for minority-owned construction businesses that have trouble obtaining surety bonds.
Construction businesses that bid on major projects need bonds that protect the government or commercial client in case the construction company does not fulfill its promises.
Connecticut law requires that 25 percent of spending on public building projects, highway construction, and other government purchases be slated for small businesses, and that 6.25 percent must go to minority-owned businesses, women-owned businesses, or disadvantaged businesses with a net worth less than $750,000.
“Connecticut’s small businesses are the drivers of innovation, entrepreneurship, and job creation, and minority-owned businesses play a vital role,” Governor Dannel P. Malloy said in a statement released Wednesday. “As the construction industry recovers, it is important that we have programs and funding in place that ensure minority contractors have opportunities to bid and win contracts and play a more active role in the state’s economic resurgence.”
The money will also underwrite loans to minority contractors who don’t have enough cash to cover costs while waiting for payment.
HEDCo began a similar bonding guaranty program in 2006. According to the administration, 110 bonds worth $12.4 million have been issued, with only one default.
“Hartford’s minority-owned businesses stand to greatly benefit from this funding and priority,” State Representative Matt Ritter (D-Hartford) said. “Small businesses are struggling all over the state, including many in Hartford. Because of this grant, the Hartford Economic Development Corporation is in a unique position to help these businesses.”
The State Bond Commission is expected to vote on the project at its next meeting on July 26.