Applications for the second round of Paycheck Protection Program loans opened last week, and so far, local banks and businesses say the process of getting much-needed federal funding to small companies is much easier than the initial round of COVID-19 relief last spring.
“The process is going well,” said Mark Bodin, president of Savings Bank of Walpole. “We communicated with all of our customers a few times in advance and it has helped them get ready early. The process seems far less stressful this time around. Last time the rules were being written during the process and there was a race to funds. Everyone has more experience this time around.”
The latest COVID-19 aid package, signed into law Dec. 27, included more than $284 billion for PPP loans, which are administered by the Small Business Administration and designed to help small companies keep employees on the payroll during coronavirus-related slowdowns or temporary closures.
In the new round of PPP funding, at least $25 billion is set aside for “second draw” loans for small businesses that also received funding through the first round of the program. More than 1,500 businesses and nonprofit organizations in the Monadnock Region received a total of over $100 million through the first round of PPP loans.
Beeze Tees Screen Printing, which has retail locations in Keene and Manchester and a production facility in Marlborough, received a PPP loan last spring. It spent all of the money on payroll expenses within three months, owner Tim Pipp said. The company, which has about 17 employees, is applying for another loan now, when business typically slows down, he added.
“This would jump-start us for the year,” Pipp said. “We typically can handle the loss we see in first quarter and can predict within hundreds of dollars what business will come in. This year is unpredictable and we need to make sure we can fully operate with staff and overhead.”
Bodin said that Savings Bank of Walpole has received about 90 second-round PPP loan applications, seeking about $10 million total. He added they are “overwhelmingly” second draw applicants, like Beeze Tees. These businesses seeking second draw PPP loans have additional application requirements, Bodin said, such as documenting at least a 25 percent decrease in revenue in at least one quarter of 2020.
“This isn’t difficult to prove for most given the realities of 2020, but is an additional step for borrowers to prove,” Bodin said.
NBT Bank in Keene also is seeing more second draw loan requests than first-time applicants, according Ben Wheeler, the bank’s senior commercial banking relationship manager. At Brattleboro Savings & Loan, President and CEO Dan Yates said the second round application process is running smoothly, but they are seeing fewer applications overall compared to the first round.
In addition to businesses, nonprofit groups like the Keene Family YMCA are eligible for PPP loans. Dan Smith, CEO of the Keene Y, said the organization was approved this week for a second draw PPP loan for about $400,000.
“On both occasions, the loan has been a difference maker in terms of our ability to get through this pandemic,” Smith said. “They don’t make up all the shortfalls, but they certainly make it easier for us to keep our staff employed through this time, and keep our doors open.”
Smith noted that while donations to the Y have remained relatively stable, its other two main revenue streams — memberships and programming — have dropped sharply during the pandemic.
“This helps sustain us until we’re able to ramp up membership and programming again,” he said.
Keene-based greeting card company Tree-Free Greetings has also been approved for a second-draw PPP loan, CEO Steve Silverstein said. The company’s first loan helped keep its 18 employees working, he said, and Tree Free has already been granted full forgiveness for the initial loan. PPP loans can be fully forgiven if businesses that received them spent the money following certain criteria, like paying for payroll costs, mortgages, rent and utilities.
Silverstein said the second draw loan will help Tree-Free continue to make up for revenue shortfalls caused primarily by the slowdown in retail sales.
“We’re the number one greeting card in Whole Foods nationally, and they’re down 30 percent in foot traffic,” he said. “... [The PPP loan] allows us to keep folks employed and adding long-term consumer value, because the pandemic isn’t ending, and retailers are still struggling.”
Applications for first and second draw PPP loans are open through March 31, according to the SBA. Pipp, the owner of Beeze Tees, said he encourages all small businesses to look into whether they qualify for a PPP loan, and consider applying.
“For businesses that haven’t applied or are not sure if they qualify, call your bank and talk to them,” he said. “They want to help and this money is there for us to use to keep us running.”