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Bottom Line: Local banks scramble to put feds’ millions into Upper Valley businesses

  • John Lippman. Copyright (c) Valley News. May not be reprinted or used online without permission. Send requests to

Valley News Business Writer
Published: 4/11/2020 9:39:37 PM
Modified: 4/11/2020 9:39:35 PM

‘Banker’s hours” is not a phrase normally associated with working around the clock over the weekend, but that’s exactly what staff at local Upper Valley banks have been doing during the coronavirus pandemic.

Admittedly, banks, like airlines and cable TV companies, are not everyone’s favorite business. They provide a service we need rather than love. And no one can explain why it should cost $3 to withdraw $20 from an ATM.

But now, hundreds of Upper Valley businesses and others wouldn’t be able to meet payroll and keep the lights on if not for community banks, who are helping to funnel $349 billion in emergency loans from the Small Business Administration to distressed businesses.

The money, known as the Paycheck Protection Program, is part of the CARES Act, the federal funding stimulus package enacted last month to extend a lifeline to businesses shut down by COVID-19.

The PPP application process is relatively simple, and if any struggling businesses out there aren’t aware of it, they should be. The “loan” (it’s really a grant) can help a business stay afloat long enough until social distancing and other restrictions on public gatherings are lifted — with luck by May — and resume, more or less (probably less) normal operation.

“PPP reminds me of a Depression-era program like the WPA (Works Progress Administration) or CCC (Civilian Conservation Corps) which was necessary then and is necessary now to get the economy going,” said Clay Adams, chief executive of Mascoma Bank.

As of Thursday morning, Mascoma Bank had received a total of 892 applications for PPP loans and had received approval for about one-third of them.

“We’re getting more efficient each day” at processing them, Adams said. (Oddly, it’s a paper-based application, although plans are afoot to make it available online.)

The three-page application for a PPP loan involves checking fewer boxes than an application for a New Hampshire Commercial Driver License and requires the applicant — which can include self-employed workers and nonprofits — to provide rudimentary facts about their business such as name of owners and size of payroll.

Loan terms are, to say the least, favorable: The loan will be fully forgiven providing that 75% of it is used to cover payroll while 25% goes toward interest on mortgages, rent and utilities over the eight-week period after the loan is made. Nor does a borrower have to put up collateral. No fees are charged (although the bank earns a sliding-scale fee for processing the loans paid by the feds).

The idea of such a program would have seemed preposterous as recently as February. A month ago the national jobless rate was 3.5%, a 50-year low.

Things changed fast.

As of last week, since the pandemic swept the country and forced businesses to close, nearly 16.8 million people had filed claims for unemployment insurance. Analysts estimate that over the past 21 days the unemployment rate has skyrocketed to more than 13%, exceeding the level at the peak of the Great Recession a decade ago.

Now the feds are desperately trying to prop up the economy to prevent — or mitigate — a full-blown depression on the scale not seen in almost a century. PPP is aimed specifically at small businesses, which employ 50% of all workers in New Hampshire and 59% of all workers in Vermont.

The feds are issuing the loans through SBA member banks, such as Mascoma, Ledyard and Claremont Savings because “this was the fastest way to distribute the money since (we) already had relationships with customers impacted by the epidemic,” Adams explained.

He said Mascoma expects to be processing loans totaling “in the tens and tens and tens of millions” in the coming weeks.

“I’ve seen them as low a few thousand dollars and as a high as a few millions,” he said.

(Newspapers of New England, owner of the Valley News, has applied for a PPP loan and is “waiting for written confirmation that our application was approved,” NNE CFO Dan McClory said.)

At Ledyard National Bank, CEO Kathy Underwood reported that the bank has received more than 200 applications for PPP loans since it began receiving them April 3.

The bank pulled in a team of 10 employees to work over the first weekend to process the loan applications.

“We needed all hands on deck,” she said.

And as of midweek, Claremont Savings Bank CEO Reggie Greene said the bank had received approval for 58 PPP loans totaling $12.9 million “with many more applications in process.”

“We’re proud to be participating in this program, which allows our local employers to keep workers on the payroll during these times,” he said. “This will help people pay their current bills and minimize the effect of the shutdown due to the coronavirus on the local economy.”

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