Over the last several weeks, conditions in New Hampshire and across the United States have changed dramatically as everyone copes with the Corona Virus. Understandably, much of the focus of the response has been on public health, social distancing, personal hygiene and the heroic efforts of frontline health care workers, first responders and so many essential service workers such as those who work in supermarkets.
The President has extended the federal Corona Virus guidelines until the end of April. Governor Sununu issued a stay at home order until May 4th. Essential services in New Hampshire such as supermarkets, pharmacies, hardware stores, gas stations can remain open. Those essential services are listed in Governor Sununu’s Executive order #17 and can be found here: https://www.governor.nh.gov/news…/emergency-orders/index.htm.
The Corona Virus is also having a profound impact on hardworking New Hampshire residents and small businesses. On March 27th Congress passed and the President signed into law a $2 trillion rescue package that will provide temporary assistance to impacted people and businesses.
The most important small business provision is the Paycheck Protection Program or PPP. According to the U.S. Senate Committee on Small Business, any business that employs 500 or fewer people is eligible for loans comparable to 250% of their average monthly payroll expenses. This loan has an upper limit of $10 million. It is expected to cover 8 weeks of payroll and can include sick or medical leave and health insurance premiums. The loan can also cover mortgage interest, rents, leases and utility costs.
If small business owners retain all of their employees the loan will be forgiven and turned into a grant. In order for the loan to turn into a grant, businesses need to retain employees but if a business has already released employees the grant is still allowed if the business rehires them by June 30th. If the business payroll has decreased by more than 25%, the loan forgiveness will be reduced by the corresponding amount.
The application deadline for these loans / grants is June 30th and retroactive to February 15th 2020. However, with small businesses doing everything possible to stay afloat and keep employees on the payroll, the $350 billion that has been allocated under the federal legislation is not likely to cover every eligible business. There may well be subsequent legislation in Washington but for now that is the limit.
Final guidance on the PPP must still be issued by the Treasury Department. That should be forthcoming very shortly and once that guidance is issued commercial banks and community banks will be able to make these loans which will turn into grants per the conditions already listed. Small business owners should contact their banks as soon as possible. New Hampshire Bankers have made it very clear that they will do everything in their power to assist small businesses through this very trying time. Banks will need to verify a business’s payroll records for loans to be turned into grants.
While the PPP will go through commercial and community banks, Economic Injury Disaster Loans will continue to be administered by the Small Business Association which can be reached at 800-659-2955 or www.sba.gov/funding-programs/disaster-assistance.
It should also be noted that Governor Sununu has allowed for deferred tax payments for anyone subject to the Business Profits Tax, Business Enterprise Tax and Interest and Dividends Tax. That deferral will extend to June 15th 2020 and will apply to the I&D tax up to $10,000 owed and the combined BET/BPT taxes up to $50,000 owed. Another key provision in the federal legislation is an expansion of unemployment benefits. According to a summary published by Kevin Brady of the U.S. House Ways and Means Committee, $250 billion has been appropriated to enhance traditional unemployment benefits.
The maximum unemployment benefit in New Hampshire is $427. Governor Sununu has already allowed benefits to be paid without a one week wait time and also announced the minimum benefit will increase from $32 per week to $168. New Hampshire residents who have lost their job due to the virus are eligible for unemployment if an employer has closed or reduced employees, if someone is self-quarantined or family members are in quarantine, or if school closures force parents to care for their children. People who are self-employed and who cannot operate their business temporarily due to these conditions are also eligible for unemployment benefits. If someone’s hours have been reduced, they too are eligible for unemployment. Unemployment benefits in New Hampshire can be applied for at the Department of Employment Security www.nhes.nh.gov.Use the red box on the homepage but also due to high volume of filing apply per the guidelines right next to the red box. Employment Security can also be reached by phone at 271-7700.
In addition to New Hampshire unemployment benefits, the federal legislation allows for a 4-month temporary $600 weekly payment on top of the New Hampshire benefit. This temporary benefit will extend to July 31. The new federal law also allows for an extra 13 weeks of compensation for those who experience longer term unemployment. These economic measures are unprecedented, but so too is the threat to hard working New Hampshire residents and small businesses which is why these measures are so necessary. Along with ramping up virus testing, providing more protective equipment and enhancing medical response capabilities we will get through this crisis despite the terrible human toll the virus is causing.
Most importantly, Thank You to the many health care providers, pharmacy employees, grocery store employees and many many other New Hampshire people who have stepped up to confront the virus and protect their fellow citizens.
As always, please reach out to me with questions at 603-387-2365.
