The funding tap is on again and loan applications are pouring in.
A week after technical issues jeopardized a federal wage protection program, the issues have been resolved and nearly 9,000 loans have been approved by the US Small Business Administration in New Hampshire since last Monday.
Businesses, from restaurants to hardware stores, have requested loans from the Paycheck Protection Program to cover growing income shortfalls. Low-interest loans give businesses between $ 10,000 and $ 10 million, depending on their size. If these companies spend at least 75% of the payroll loans within eight weeks of receiving the funds, the loan is canceled.
The recent successful loan delivery has given businesses the ability to rehire employees and keep them out of UI.
Yet even though the program is helping more and more businesses in the Concord area, the situations on the ground differ considerably.
For some, it means a 180 degree change in their situation. Jeff Bart, owner of the Granite State Candy Shoppe, had laid off most of his 20 employees due to the closure. The Concord store, which sells homemade chocolates and ice cream, is not considered an essential business, and online orders have not been the same.
Since receiving the federal loan, Bart has been able to rehire all but two of these staff. Now that the store is still closed to pedestrian traffic, Bart is getting creative in putting his employees to good use. They streamlined, cleaned and even repainted the store.
“We are taking the opportunity to reorganize,” he said. “How things are laid out.”
Others, like FirstTracks Marketing Group, use the loans to move forward as the business grows. The Concord Company has helped clients redesign websites to handle online orders and reorient business strategies to cater to an online audience.
Some are still waiting for what to do with the loan money. This includes Frank Scaramuzzi, director of Romance Jewelers on North State Street.
For the moment, the employees of Scaramuzzi perceive unemployment. His wares, usually on display in his store, are now in a safe. And he stays on his loan until he decides it makes sense to reopen at all.
“We haven’t implemented it yet because we can’t figure out our brains to send our staff back to work who really can’t go back to work,” he said.
Still others decided they didn’t need a loan. Richard Kelly is a sole proprietorship – he is the owner and sole employee of the Concord Barber Shop. The pursuit of a small business loan was not on the cards, Kelly said. With exceptionally low overheads, unemployment benefits have been sufficient to keep its costs in line.
“I didn’t really take advantage of it,” he says.
As small businesses continue to face a second month of shutdown, banks have rushed to repay loans quickly.
The Merrimack County Savings Bank initially saw a glut of requests, working all weekend to accommodate them. Now, as more businesses collect the cash, the line has shrunk, according to James Gallagher, the bank’s senior business lending officer.
“We didn’t have as many requests in the second round as we had in the first round,” said Gallagher.
But the process has not always been smooth. Businesses have experienced weeks of waiting times for the first and second installments of SBA loan funding.
The first installment ran out in weeks; the second started last week with system problems that prevented banks from distributing money quickly.
Last week, NH Bankers Association president Kristy Merrill called the software outages “unacceptable”, urging “immediate action to address this persistent problem” at the federal level.
“New Hampshire banks are fighting to help businesses stay afloat 24/7, whether through P3 loans, or through traditional loans and other efforts outside of federal programs. “said Merill. “We know the task is big and the demand is high, but New Hampshire banks are up to the challenge.
Some metrics indicate that it could be just a few days before the expiration of the last SBA funding round.
As of Friday, May 1, the Small Business Administration had approved $ 175.7 billion of the roughly $ 310 billion in available loans, according to SBA records.
That’s just under 57% of the total loans counted in a few days – split between 2,211,791 loans from 5,432 lenders in total.
In New Hampshire, a total of 8,929 loans were approved between last Monday and Friday – a total of around $ 572 million.
That’s an average loan amount of $ 64,160 per business in Granite State. The national average is around $ 79,000, according to the SBA.
Nearly 600 of those loans came from local banks like Merrimack County Savings Bank, Gallagher said.
“To us it was like ‘listen, this is something none of us have ever experienced,” said Gallagher. “We do whatever the government asks us to do to help businesses.”
(Ethan DeWitt can be reached at [email protected], (603) 369-3307, or on Twitter at @edewittNH.)