As the pandemic continues to place a stranglehold on local businesses, new forms of state and federal relief are coming online for Berkshire County businesses.
Today, January 11, the U.S. Small Business Administration (SBA) reopens the Paycheck Protection Program (PPP) for low-interest loans that the administration will forgive as long as businesses keep within the guidelines of using the money for payroll and other eligible expenses.
Only small banks and financial institutions serving low-income communities will be allowed to process first-draw PPP loans today; second-draw loans begin Wednesday, January 13. Shortly thereafter, all participating lenders will be able to process loans to businesses that opened before Feb. 15, 2020.
Congress signed off on up to $284 billion in relief in December. The funds are available through March 31, 2021.
The first round of PPP loans was granted to 2,314 Berkshire County companies that employed a total of more than 25,000 people at the start of the pandemic, according to data reported by borrowers. The largest loan, for $5.4 million, was granted to Berkshire County ARC. The largest grants in South County went to Kripalu and Austen Riggs for $3.1 and $2.5 million respectively.
For businesses looking to get in on the next round, the PPP borrower application form was made available at SBA.gov on Dec. 31. Those looking to apply are encouraged to do so right away. Several local banks are reporting massive interest and Greylock Federal Credit Union alerted business members that they “are seeing a high level of inquiries coming their way and it may take a day or so for one of them to get back to you, so please be patient.”
To qualify for a second-draw PPP loan, a company must employ less than 300 people, have been operating before the pandemic, and had gross revenues during any quarter of 2020 that were at least 25 percent less than the same quarter the previous year. As with the first round the loan maximum is calculated by multiplying the average total monthly payroll for 2019 by 2.5, but in this round restaurants and hotels may use a 3.5 multiplier.
PPP loans are not the only option for local businesses in need of help. At the end of last month the state launched a $668 million program to provide financial assistance to Massachusetts small businesses impacted by the COVID-19 pandemic.
The new business relief program will offer grants up to $75,000, but not more than three months’ operating expenses, to be used for employee wages and benefits, space-related costs, and debt service obligations. The deadline to apply online through the Massachusetts Growth Capital Corporation (MGCC) is Jan. 15.
This program will target the industries most hard-hit during the pandemic including restaurants, indoor recreation and entertainment establishments, gyms and retail stores.
At an event touting the program last week Gov. Charlie Baker explained that the program was just one step in a broader program to help small businesses in the state.
“This has obviously also been a very challenging year for other sectors of our economy and small business owners perhaps more than anyone else have gone through unimaginable disruption loss, and uncertainty,” Baker said. “Despite that they’ve done everything in their power to keep their staff and their customers as safe as they possibly can and to commit to this state’s very aggressive safety protocols.”
State Sen. Adam Hinds also praised the measure, but he did want business owners to know that if they had already applied through the MGCC for COVID relief there is no need to apply again.
“For all those who already applied through Massachusetts Growth Capital Corporation, there is no need to reapply and you will be notified of any relief next week,” Hinds explained.
Hinds also pointed business owners to the Berkshire County Small Business Recovery Fund which provides grants to small for-profit businesses in Berkshire County. That program focuses on very small businesses of under 10 employees for reimbursement of state-approved qualified expenses. Those include payroll, marketing expenses and lost sales. Applicants will be required to submit proof of a qualifying expense, along with proof of payment, for reimbursement up to $3,000.
