The Paycheck Protection Program authorized up to $349 billion in forgivable loans to aid small businesses and nonprofits adversely affected by the coronavirus outbreak.
Implemented by the Small Business Administration, the PPP was part of the $2.2 trillion CARES Act, signed into law on March 27, to provide economic relief to businesses struggling to pay their employees. The loan amounts would be forgiven if used to pay their employees, most mortgage interest, rent and utilities during the eight week period after the loan is made, and employee and compensation levels are maintained.
Starting April 3, small businesses and organization could begin applying for and receiving loans to cover their payroll and other certain expenses through existing Small Business Administration lenders. Independent contractors and self-employed individuals began the application process starting April 10.
But by the middle of the day on Thursday, it was reported that the funds for PPP had run out, forcing the SBA to stop accepting applications.
Unfortunately for those that didn’t apply early enough, there isn’t another program out there like the PPP right now, as Congress continues to battle about the parameters of additional funding. There is hope that more funding will be available, but for now, it’s a bit of a waiting game for those that didn’t get into the first round of loans.
Kris Young, interim executive director at Touchstone Farm in Temple, said when she submitted her application for a PPP loan there was hope she got it in early enough. But for Young, she was included in the many businesses around the country that didn’t get in on the first round of funds.
“It wasn’t that we didn’t get approved, the funds ran out before our application was approved,” Young said Monday. She is hopeful that more funds will be available soon.
Dave Szehi, owner of Harlow’s Pub in Peterborough, said he wanted to stick with his local bank and while they were still figuring out the details when the PPP loans became available on April 3, he submitted his application on April 6.
With more than 40 employees on the payroll, Szehi has been worried about them having enough money coming in.
“That was my first and only concern – to pay my employees,” Szehi said. “Our payroll is not small.”
But as of Monday, all Szehi had heard was that he was approved, but that message came more than a week ago.
“I’m trying to be patient,” Szehi said. He was told there was some paperwork he’d need to sign, but hasn’t gotten a concrete update of when that will happen after corresponding with his bank on Friday. And as the days and weeks go by, it gets harder and harder.
“I know people care. I know the local bankers care and are working hard on our behalf,” Szehi said.
While some other restaurants made the decision to switch to take out, Szehi closed Harlow’s doors after Gov. Chris Sununu’s orders. But at the end of the day, it’s his employees that he’s worried about.
For those that got their applications approved before the funds ran out, it means a huge relief is on the way that will help bridge the gap of lost revenue during these unpredictable times, while keeping staff paid and expenses covered.
Karen Hatcher, executive director of the Cornucopia Project, said she knew how vital a PPP loan could be for the nonprofit. And soon she started to hear how important it was to apply as soon as possible.
“That’s the advice we got – don’t wait,” Hatcher said.
Hatcher submitted her application to Bar Harbor Bank & Trust on Friday, April 10 and on Friday she found out Cornucopia had been approved for just under $30,000. She said that will help keep the five person staff, one full time and the other four part time, employed for the next four months.
“And that’s what it’s intended for, to keep your employees,” Hatcher said.
Kristen Stanton, executive director of the Lukas Community, said they got their application in early to People’s United Bank and were hopeful. On Friday, Stanton found out that their loan request for $96,000 was in process. The loan will cover them through June 30 and “will help us close the gap tremendously,” Stanton said.
When volunteers were called back to Germany in March, Stanton found local people to fill in the hours, but it comes at a cost.
“This will give us some time to sit down and restructure our business plan,” Stanton said. Because she doesn’t anticipate seeing any volunteers returning for the remainder of 2020.
Dianne Mercier, NH Market President of People’s United Bank, said they saw a surge of applications in the first five days of the Payroll Protection Program. She said they saw more loan applications in two weeks than they typically do over the course of a year. People’s ranked in the top 10 banks in the country for distributing PPP loans, Mercier said.
While it seemed like the $349 billion went very quickly, lasting just two weeks, Mercier said “honestly I think we had a few more days then a lot of us thought we would.”
Mercier said if an applicant received an SBA authorization “you will get your funds.” The goal was to have funds distributed within 10 days of authorization, but the shear number of loans may cause some to take longer, Mercier said.
Mercier said Thursday that People’s is not accepting any more PPP applications at this time. Without a clear idea of when and if another relief package will be put together, Mercier said it might look very different.
“The question right now is what will it look like?” Mercier said.
Her advice for those that didn’t get their application through is to keep an eye out for further relief funding, starting with the U.S. Department of the Treasury website, https://home.treasury.gov.
“When it comes out again, if something comes out, take advantage of it very quickly,” Mercier said.
Unfortunately, once the PPP ran out, Mercier said there is nothing else there like it. And with many businesses looking for relief closed down right now, Mercier said “it’s going to be very hard to borrow money right now if you have no cash flow.”