MANCHESTER, NH – On Tuesday night, the Manchester Board of Mayor and Aldermen approved the creation of a loan fund designed to help local small businesses once the New Hampshire Governor Chris Sununu’s stay-at-home emergency order concludes or June if Sununu does not extend the order past May 31.
The initiative, officially called the Manchester Small Business Recovery Loan Fund, transfers $500,000 from the Manchester Development Corporation to city for the fund with the city also placing $500,000 into the initiative from its special revenue reserve account.
That money will then be available for up to 40 Manchester small businesses for 2.0 percent loans for costs associated with resuming operations. Manchester Chamber of Commerce CEO Mike Skelton suggesting that the likely definition of small business in the measure include businesses of less than 50 employees with brick and mortar locations, noting that they were the most likely to be affected economically by the COVID-19 pandemic.
The plan required a tie-breaking vote from Mayor Joyce Craig to be passed, with the Aldermen splitting a 7-7 roll call.
Craig informed the board that the money being requested was already earmarked for economic development and that it would be unclear when federal recovery aid from the recently-passed $2 trillion CARES Act would become available for local businesses.
She added that any money left over from the $1 million fund would be transferred back into the reserve account for future use.
“A month ago, Manchester’s economic outlook was strong. Today, we’re faced with implications of COVID-19 that are beyond our control, and most of our local small businesses have temporarily closed or have experienced significant decreases in business,” she said in a released statement about the fund. “Our small businesses need our help and support during this unprecedented time and this low-interest loan fund will incentivize small businesses in Manchester to reopen and resume normal operations.”
Supporters of the measure felt that the initiative showed the city looks to be proactive in helping local small businesses recover from the COVID-19 pandemic, and that the best thing the city can do to help taxpayers is ensuring the city has a tax base left after the pandemic concludes.
Opponents of the proposal provided a variety of reasons for their position.
Some opponents questioned its timing, asking for the proposal to be revisited when there is a better idea when the crisis’ end might be in sight. Other opponents of the measure felt that the city would be better served with direct aid to taxpaying residents instead of Manchester’s small businesses. At-Large Alderman Joseph Kelly Levasseur believed the entire concept was redundant, citing $1.2 billion in funds that Sununu is planning on releasing to small businesses across the state.
Ward 5 Alderman Anthony Sapienza believed that the idea could only work if loans were given specifically to business owners rather than incorporated entities, ensuring an extra level of oversight in case the funds were misused.
After some confusion over how many votes the measure needed to pass the board, City Solicitor Emily Rice determined that the city charter required only a majority vote.
In addition to the mayor, the motion was supported by Ward 1 Alderman Kevin Cavanaugh, Ward 2 Alderman Will Stewart, Ward 3 Alderman Pat Long, Ward 9 Alderman Barbara Shaw, Ward 10 Alderman Bill Barry, Ward 11 Alderman Normand Gamache, and At-Large Alderman Dan O’Neil.
Sapienza and Levasseur’s votes of opposition were accompanied by “no” votes from Ward 4 Alderman Jim Roy, Ward 6 Alderman Elizabeth Moreau, Ward 7 Alderman Ross Terrio, Ward 8 Alderman Michael Porter, and Ward 12 Alderman Keith Hirschmann
The structure of the Manchester Small Business Recovery Loan Fund is as follows:
- $1,000,000 in initial funding from the City of Manchester (allocated from special revenue account) and MDC; additional funding to be sought from other partners.
- Maximum loan amount of $25,000 and the interest rate at 2.0 percent. At this maximum loan amount and $1,000,000 in initial funding, 40 small businesses can participate.
- Eligibility restricted to any Manchester small business that experienced a loss of revenue or closure due to the COVID-19 emergency. MDC will create specific definitions and guidance on eligible small businesses.
- Eligible Uses: Use of loan funds must be restricted to costs associated with resuming operations: working capital, payroll, workforce recruitment, and inventory. No capital improvements permitted.
- Start Date: No sooner than June 1, 2020, assuming the public health situation is improving, and closure of business order is lifted. applications can be submitted in advance of this date to ensure funds are ready for disbursement.
- The application process will be based on the existing Queen City Loan Fund process
- Loan Terms: 60 months for loans from $15,000-$25,000, 36 months for loans under $15,000. $25,000 for 5 years at 2.0 percent is a monthly payment of $438.19). No interest or payments are due for 3 months.
- Capital Regional Development Corporation (CRDC) will serve as the loan underwriter on behalf of MDC. CRDC will reduce their normal fee to process each loan to $400 from the current level of $750.
- MDC will review and approve all loan applications based on CRDC guidance and completion of the loan application and supporting documents.
- Using Queen City Loan Fund process and documentation and a guide, MDC will develop an application, guidelines, and eligibility terms for the Manchester Small Business Recovery Loan Fund.
- MDC will provide monthly reports to the BMA on the use and performance of this loan fund.
- Greater Manchester Chamber will serve as a partner to coordinate marketing, outreach, and promote awareness of the program to eligible small businesses.
