Door shuts on New Hampshire businesses looking for PPP loans

Federal relief program runs out of money, with remedy in limbo

Ppp Logo72Joe Bator, executive vice president at Primary Bank, found out at 10:20 Thursday morning that the federal Payroll Protection Program ended when a message popped up on his screen while he was working on a handful of last-minute applications.

“People who came into us this morning, they just ran out of time,” he sighed. But before the program closed, the U.S. Small Business Administration approved 393 of Primary’s forgivable loans for $98.7 million – 10 times the number of SBA loans the bank handled all year.

But businesses didn’t have much time to get a piece of the $349 billion allocated by Congress as part of PPP – part of the CARES Act – aimed at alleviating the economic shock of the pandemic-induced recession. The program, in fact, ran out of money in less than two weeks.

In 13 days, nearly 5,000 banks around the nation won SBA approval on 1.66 million applications, though most of the loans have yet to close, so the vast majority of the funds have still not landed in bank accounts.

There is bipartisan support to replenish the program, but there isn’t bipartisan agreement on much else, so for now, those businesses that didn’t get their applications in on time will have to wait until lawmakers in Washington work things out.

New Hampshire’s share

The PPP was Congress’ attempt to stop the hemorrhaging of jobs as a result of the coronavirus crisis and emergency orders in most states that shut down all but essential businesses.

The program promised to forgive the loans if the businesses that received them – those with fewer than 500 employees –spent at least three-quarters of their loan over eight weeks on roughly the same payroll it maintained before the crisis. But there are proposals to extend the payback period and to make that eight week payroll period more flexible)

New Hampshire – which is dealing with nearly 125,000 in initial unemployment claims in less than a month – led the nation with a 6,429.42% increase in claims in April, compared to before the crisis started in the middle of March, according to a recent report by WalletHub.

And the state appears to have gotten its fair share of the PPP as of April 13, according to some preliminary data released in SBA report.

(The SBA’s New Hampshire District office in Concord could not provide final numbers by deadline)

According to the SBA’s numbers – recorded with a little more of $100 billion left of the PPP’s original $349 billion – the agency approved some 7,113 loans to New Hampshire companies, totaling $1.5 billion, for an average disbursement of $214,000. The data doesn’t include many sole proprietorships, which weren’t able to submit applications until Friday, April 10.)

That represents a little less than a quarter of the small businesses in the state, based on 2017 census data, and more than a fifth of all establishments in the state.

New Hampshire ranks 19th nationwide in loan approval percentages, with 24% of businesses getting loan OKs.

That’s better the national loan approval percentages of 17% nationally.

At the top were Nebraska, North Dakota, South Dakota, Oklahoma, Iowa and Kansas. In terms of New England, New Hampshire is behind Maine and Vermont, but ahead of Massachusetts. California is at the bottom of the list, with 7% getting loans. New York and New Jersey – the epicenter of the pandemic – ranked third and fourth from the bottom, with approval rates of less than 9% each.

Nationally, when it comes to loans by industry, the construction sector got the most at through April 13, nearly $34 billion, or 13.7% of the total disbursed. It was followed by professional services and manufacturing, both about $30 million. Hospitality and retail businesses, largely believed to be two of the industries hardest hit by the crisis, received 9.2% and 8.6% of the money, respectively.

There was no breakdown by size or sector by state.

Community bank advantage?

New Hampshire measures up roughly the same when it comes to the amount of loan per employee. In other words, if the loan total were spread out over every worker in a business it would come out to a little over $5,000 per employee, ranking New Hampshire at number 16. Nationwide, it would amount to $4,000. North Dakota stands at $7,100 whereas Nevada is on the low end, at $2,500.

“The states that do best have more community bankers on the ground who know their customers,” said Bator. “We were able to mobilize our resources to do a year’s worth of business in a few weeks. Larger institutions that are going to run a program though a web platform are going to lose people.”

Primary said it was able to help some of those larger bank refugees that came during the beginning of the week, but not all of them.

The local SBA office said it worked hard to approve the loans as quickly as possible, staying open until 7 p.m. each night and Saturdays and holding two webinars a day.

“I am very proud of the team here and our extended team of resource and lending partners in the state for their commitment to our small businesses to roll out this brand-new program in the last two weeks,” said Rachael Roderick, acting director of the SBA’s New Hampshire office.

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