Details remain on how Sununu’s small business relief program will work

Newly announced Main Street Fund designed to ‘empower small business owners to make decisions for themselves’

Coronavirrus Press ConferenceIf your business wants any of New Hampshire’s new $400 million Main Street Relief Fund, you have to fill out a pre-application in the next two weeks.

The state Department of Revenue Administration, the agency administering the program, wants to know how much applicants made last year and expect to make this year.   Then it hopes to send a check for the difference minus whatever federal aid a business already received, depending on how much is needed and how much money is available.

There is a chance that if a business does get some money it might have to pay some of it back. But there is no chance that it will get any money if it doesn’t fill out the survey before May 29.

The Main Street Fund was announced by Gov. Chris Sununu on Friday. The money comes from the $1.25 billion in non-restricted federal CARES Act money that the state received at the end of March.

The governor also announced a $60 million program to aid nonprofits, $50 million for the healthcare sector, $25 million for child care, $15 million for farms and food pantries, $15 million for public higher education and $30 million for the state Business Finance Authority to an as-yet undefined program for businesses that might fall through the cracks.

All but the BFA funds were recommended, at smaller amounts, by the Governor’s Office for Emergency Relief and Recovery, or GOFERR. Sununu, arguing the need is now, said he wanted to get more funds out more quickly.

“It is heartening to see such a large portion going to business. It shows there sure is a need out there,” said Mike Skelton, CEO of the Greater Manchester Chamber of Commerce.

Empower small business owners

Unlike the federal Payroll Protection Program and Emergency Injury Disaster Loans, the Main Street fund would not be a first-come, first-served in order to avoid the kind of mad rush that caused computers to crash and frustrations to boil. And it is designed to be a grant program, not a loan program.

“Instead of the usual strings attached, this will empower small business owners to make decisions for themselves,” Sununu said at a press conference announcing the program on Friday.

Most, but not all, businesses are eligible.

To qualify, a business can’t make more than $20 million in annual revenue and must be based in New Hampshire. Businesses getting other money from the other funds – nonprofits, healthcare, daycare and agricultural – are also not eligible. You don’t have to have paid taxes or even filed a return to get the funds.

One murky area is for self-employed people. The rule of thumb, said Commissioner Lindsey M. Stepp, is that only those that file with the Secretary of State as a business are eligible.

The pre-application is simple: you need to report your actual gross receipts from 2019 and your estimated receipts in 2020. It also asks how much of your compensation and wages are paid in and out of the state as well as how much money you may have gotten from the PPP, the state unemployment WorkShare program and other Covid-19 assistance programs.

By Monday, Sununu said, some 3,000 business had filled out applications – a fraction of the businesses in the state, but an indication that the program is working, said Sununu. The DRA said it has fielded about 35 to 50 calls, which the agency returns as staff will allow. It hopes to set up a dedicated call center and developed a frequently asked question section.

Still working out parameters

But some questions still await answers: Will there be any spending restrictions whatsoever? Will there be a cap? Will you have to pay some back if you do better than expected?

“We can’t answer these questions,” said GOFERR Director Jerry Little at the press conference. “I realize that this is frustrating to reporters, but we needed to start the survey to design the program. The governor wants to get the money out the door as quickly as possible.”

Stepp gave a similar answer.

“We are still working out the parameters of the program based on the survey,” she said, though she did think companies that ended up making more than last year will have to pay some of it back.

“There is a potential obligation,” she said. “Still, if you are off by $10 it may not be. If it’s a larger percentage, maybe.”

Stepp urged people to fill out the survey, even if they are not sure whether they will participate at this point.

“This is a great opportunity to businesses that are in need,” she said. “Hopefully, it will ease the economic pain.”

The governor will make the final determination, and plans to announce more specifics on Monday, June 1, three days after the pre-application deadline. Then businesses will have until June 8 to apply in earnest. The timeline did not say when businesses will get their money.

Skelton likes the two-step process “to figure out which is the best way to give out the funds,” but said that “it is important that businesses get a clear understanding of the rules before they submit.”

This, he noted was a big problem, with the $759 billion PPP program, with shifting guidance on what it would take to get forgiveness on the loans. At first, it seemed all businesses would have to do is pay three-quarters of the funds on payroll and the rest on mortgage, interest, rent and utilities. Then – after some publicly traded corporations disclosed that they were getting loans – the Treasury Department demanded that businesses that didn’t really need the funding pay it back by May 15 or be held criminally liable. Then the deadline moved to May 18 and “safe harbor” was granted to those firms that got less than $2 million.

Despite that and other issues, some 22,000 New Hampshire businesses have so far gotten $2.62 billion in PPP loans, though applications.

The BFA Small Business Gap program was originally called the “safe harbor forgivable loan program,” but it is not clear if it would be based on the SBA program and if so, how it would differ.

The online link to the program connected to a Sununu tweet that said “in order to ensure that no small business falls through the cracks, similar to what has happened with the Federal PPP program, we are creating a $30 million “Small Business Gap Fund,” which “targets relief aid to business impacted the most; allows BFA to use their expertise and discretion in identifying areas of unmet needs.”

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