NH businesses can apply for PPP loans at smaller banks, credit unions beginning Friday

New Hampshire businesses and business organizations can apply for the latest federal Paycheck Protection Program forgivable loan program at small banks and credit unions beginning Friday and at any bank or credit union beginning Tuesday.

“We are excited,” said Joe Bator, executive vice president and senior lender at Bedford-based Primary Bank that approved more than 700 loans worth $92 million in the first two PPP rounds. It’s going to be a busy three-day weekend for us,” he said.

The PPP is rolling out more slowly this time in order to avoid the mad rush that crashed computers at the U.S. Small Business Administration, which both guarantees, approves and eventually forgives the loans if they are spent on payroll and other expenses. Large banks and large lenders dominated the program during the first rollout.

In order to give more diverse and rural businesses a fighting chance this time, the program launched Monday, Jan. 11, through only Community Financial Institutions. Ironically, that froze out New Hampshire because no CFIs  were participating.

On Friday, Jan. 15, the SBA opened the program to banks with less than $1 billion in assets. There used to be a lot of those in the Granite State, but banks have grown here both through mergers and organically. In addition to Primary, there six other banks based in New Hampshire that qualify: Franklin Savings Bank, Woodsville Guaranty Savings, Salem Co-operative Bank, Savings Bank of Walpole, Claremont Savings Bank, Millyard Bank and First Seacoast Bank, though there are small banks in other states with branches here, and New Hampshire businesses can also go any out of state bank to apply for a loan.

Eight New Hampshire credit unions also have of less than $1 billion and are also accepting applications.

Some new rules

The new rollout will be different in other ways.  For one, loans won’t be instantaneous. Applications willl be held “for a short time” to ensure that they are eligible, said Rachel Roderick, the SBA’s deputy district director in New Hampshire.

There are other differences as well, the main one being that those who received a previous PPP loan can apply for another one, though not for as much money ($2 million maximum as opposed to $10 million) and they will have to show they suffered a 25% drop in revenue in one quarter. Another change involves, nonprofit 501(c)(6) organizations, such as chambers of commerce and trade organizations, which can apply for assistance this time.

That is a “welcome change and it’s an option we are actively considering as part of our planning for the year as it will help ensure we remain a key resource for our members,” wrote Michael J. Skelton, CEO of the Greater Manchester Chamber in response to an emailed inquiry.

The New Hampshire Lodging and Restaurant Association plans to participate participating as well, said CEO Mike Somers.

“This has been a tough year,” Somers told NH Business Review  “We saw a significant reduction in revenue.”

NHLRA’S members – as well as anyone else in the hospitality industry – will also benefit from the new law, since their permitted loan amount would amount to 3½ months of payroll, as opposed to the 2½ months that other businesses are entitled to.

There is no such extra boost for performance venues in the PPP part of the stimulus package, but they might want to wait until the rules for the “Save our Stages” part of the stimulus package are released, since that caps the maximum loan at $10 million rather than $2 million.

One other little known but key change in the new law is that those participating in the PPP can also take advantage of the Employee Retention Tax Credit, though not for the same expenses as claimed under PPP.

The new law gives credit on payroll taxes, so they can be realized immediately for some, quarterly for others, and with a credit of up to 80% an applicant can end up getting as much as $14,000 per employee. It is also retroactive to last year.