Bankers say PPP loans saved 40,000 jobs in New Hampshire

NH Bankers Association President Kristy Merrill

The first round of funding under the Paycheck Protection Program has saved roughly 40,000 New Hampshire jobs, according to the New Hampshire Bankers Association.

The initial funding of $350 billion approved in late March for the PPP under the CARES Act was disbursed in the first two weeks, but Congress has approved another $310 billion for the same purpose.

“Overall, the (New Hampshire) banking community has really embraced this program and gotten behind it,” said Kristy Merrill, president of the New Hampshire Bankers Association which has 37 members. “It was very successful but there is still so much demand.”

Merrill said New Hampshire institutions, including commercial banks, savings banks and credit unions, approved 7,400 loans with about 75% for $150,000 or less. Overall, about $2 billion in loans were approved, according to figures from the Small Business Administration.

“I know one bank with 75% of their approvals that were for less than $100,000,” Merrill said.

According to a survey by the National Federation of Independent Business, 80% of respondents said they were still waiting to learn the status of their applications while 20% said their applications were processed and the money deposited in their account.

Strict criteria

The PPP is designed to allow small businesses to continue paying their employees over an eight-week period even if the business is closed or has had to lay staff off because of lower sales. The goal is to allow for a seamless transition when the state economy reopens and stay home orders are lifted.

“If they are able to open tomorrow, you don’t want them scrambling to hire employees,” said Cheryl Croto, public affairs specialist with the SBA office in Concord. She said the PPP “is supposed to keep people on the payroll whether they are working or not. It takes the place of unemployment.”

Other expenses that can be paid for with a PPP loan include state and local taxes, interest on mortgages, rent and utilities. According to the SBA, a company can receive an amount equal to their average monthly payroll for the last 12 months plus 25% for other expenses.

However, in order for the PPP loan to be forgivable, the borrower has to meet strict criteria and keep detailed records. Businesses have to retain employees and maintain salary levels during eight weeks. If a company can’t retain or rehire all employees or lowers wages, then the amount that will be forgiven is reduced.

Many businesses are reportedly having second thoughts about taking a loan because they are not sure they can reopen after eight weeks and if they do, may not have the demand to retain all employees.

The SBA wants the requirement that 75% of the loan be spent on payroll reduced to 50%.

And the NFIB has laid out a list of recommendations to alter the PPP requirements, including increasing the flexibility for the loans to be forgivable.

A companion Economic Injury Disaster Loan program, which was already in existence before the pandemic, can also be utilized by small businesses hit hard by the coronavirus. EIDLs will advance up to $10,000 in immediate relief. The money does not have to be paid back. Part-time employees can be included in an EIDL, according to the SBA.

“The small business community’s biggest frustration was with the EIDL,” said Bruce Berke, state director of the NFIB in New Hampshire. “I think it has not met the expectations that were created. I heard from a couple (of businesses) that it was not what they had hoped for. I guess it got overwhelmed (with requests.)”

Nationwide, the first round of funding for PPP provided payroll assistance to more than 1.6 million small businesses in all 50 states and territories, the SBA said.

This article is being shared by partners in The Granite State News Collaborative. For more information visit collaborativenh.org.