In May, most companies receiving federal paycheck protection program loans were happy with the cash injection as they struggled with lost revenue from the Covid-19 pandemic, but their gratitude was offset by the lack of clarity about the issuance of Lending subdued. as proposed in the Congress-approved CARES bill.
A few months later, with rule changes and the extension of the PPP loan period, the uncertainty remains.
“I think it’s fair to say that there is a lack of certainty about the completion of the program,” said Bruce Berke, state director for the National Federation of Independent Business. “I know the money has to be spent in 2020. Hopefully the forgiveness process will be more structured. “
The initial funding approved by Congress said that 75% of the money had to be spent on payroll in order to make a loan. The money had to be spent in the eight weeks after it was received and paid back in two years if it was not given.
After an outcry from many companies, the subsequent Paycheck Protection Program extended the Flexibility Act of the 5th, such as rent, mortgages, and utilities, as well as a repayment period of up to five years for loans granted after June 5th and two years before June 5th be completed.
Dave Levin, owner of Mad River Coffee House in Campton, received a loan in May at the time he expressed concern about the process and requirements of forgiveness.
Levin told U.S. Senator Jeanne Shaheen, D-NH that without clear guidelines on forgiveness, he was reluctant to spend the $ 82,000 he was given.
Four months later, Levin said the money had been spent solely on payroll and he would be able to repay 100% if needed, but would file a request for forgiveness.
Levin said he had only recently received information about the award process and that he had communicated with his bank.
On the upside, Levin said the summer season was far better than forecast, with sales up 6% year over year in August and likely 15 to 20% more in September.
“It’s been a very busy season in the White Mountains,” he said. “Second homes are full, campsites are full, and hiking trails have been bullied up here.”
The U.S. Small Business Administration did not waive any loans, but received approximately 100,000 requests for waivers, a small percentage of the roughly 5 million total loans that were approved. According to recent reports, officials have promised to start processing these applications.
“The SBA Forgiveness Portal is open and receiving requests,” said Kristy Merrill, president of the New Hampshire Bankers Association.
Merrill said there was now legislation awaiting approval from Congress to “streamline” the process of lending less than $ 150,000, which she believes represents 86% of the approved loans in New Hampshire. However, Merrill warned that given the political climate in Washington, the legislation may never be approved.
“It’s seen as helpful for small businesses and would certainly make processing easier,” said Merrill.
Some banks are holding back from filing for forgiveness in hopes that Congressional approval will ease the paperwork, Merrill said, adding that others move forward because borrowers don’t want to wait.
Another recipient of PPP loans, Kurt Steelman, President of Steelman Production Services in Keene, is in a more difficult position than most companies. Steelman’s company provides labor for the entertainment industry and has worked on venues such as Fenway Park. He said he is able to keep a small staff on the payroll but has lost millions in deals and he doesn’t see him returning anytime soon.
Most of its employees are temporary and part-time, hired for certain shows. As for his loan and potential forgiveness, Steelman said he has not yet applied for forgiveness and is waiting to see how his business develops in the coming months.
“I just have to see what happens,” said Steelman.
Other loan recipients said they had been instructed by their lender to simply wait for all the rules to be set.
“I received an email from my bank telling me not to apply yet,” said Scott Rice, owner of Woodstock Inn and Brewery. “The rules are always changing.”
Borrowers have 10 months after the loan term has expired to apply for waiver.
This article is shared by partners in The Granite State News Collaborative. For more information, visit kollaborativnh.org.