The shelves of Gibson’s are closed, but the books are still going out.
The book store is shut to foot traffic until May 4 and probably longer. Sales are down, with book browsers staying home. Employees have taken a pay cut; fewer of them come to the physical workplace at any one time.
But the books are still going out.
As the spread of a deadly virus and a shutdown order to slow it have paralyzed business activity across the state, sales at Concord’s cherished book store have continued online. Shipping is only 99 cents. Customers are chipping in when they can.
And one other thing hasn’t changed: Everyone still has a job. Since the COVID-19 crisis began, Gibson’s owner Michael Herrmann has not had to lay off any of his workers.
“We’re doing some business,” Herrmann said. “It’s not at the level it was before, obviously, but we’re keeping going. And we’re keeping all of our staff on payroll.”
The situation – a lucky one in these times – is partly a function of conscious decision making. Herrmann closed the physical store before the order from Gov. Chris Sununu forcing him to, but he always intended to keep employees on as long as possible.
But it’s also the result of considerable governmental assistance. Gibson’s is one of thousands of businesses across the state taking advantage of a raft of state and federal programs to give them cash assistance as they navigate a world of no physical contact and no walk-in sales.
One of them, the New Hampshire WorkShare program, allows businesses to reduce wages for workers and supplement that reduction with state unemployment money, letting them avoid layoff decisions for many.
The other, Small Business Administration’s “Paycheck Protection Program,” are straightforward bank loans backed by the federal government that come at almost no cost to the business – provided they put most of it into payroll to keep their workers.
Now, the latter program is in peril. The SBA loan program, originally funded at $350 billion, is completely tapped out, Treasury official announced Thursday morning. Members of both parties in Congress are scrambling for a quick funding fix as businesses fret.
In Concord, the two programs have made a difference. Gibson’s has successfully applied to both and has received the payment already. Like others, the South Main Street store is banking that the loans will see them through to the other side of a crisis whose timeline remains in flux.
And for Herrmann it’s just the kind of bridge assistance that should allow him to keep the store running smoothly through the summer.
The store made the tough call to reduce salaries by 40%, then use the New Hampshire Work Share program to allow employees to make up the wage difference using state unemployment funding. They got that without delay.
“The state was very good about getting it,” Herrmann said.
Then they turned to a local bank, Merrimack County Savings Bank, to apply for the SBA loans as soon as they came online on April 3. Federal officials have encouraged business owners to apply for the SBA loans through their local banks.
According to James Gallagher, senior vice president and commercial loan officer at Merrimack County Savings Bank, 400 Concord-area businesses have applied for the SBA loans since April 3, and many had been approved ahead of the money running out Thursday.
Gibson’s got its loan approved and into its account within a week of applying, Hermann said – an unusually fast turnaround for a bank.
Matt Jeannotte, owner of Granite State Naturals, a natural food store on North Main Street, is in a similar position.
The shutdown has eaten into sales by 30%, he said, as customers have stopped impulse buys while in the store and moved to targeted purchases online.
“It’s the little add-ons,” Jeannotte said, noting what isn’t being bought. “The packs of gum, the protein bars, the hand lotions. The small items. They really add up.”
The store switched to curbside pick up well before the shut down order, and is now hoping to expand to delivery to boost sagging revenue.
But not a single employee has been laid off, nor have any wages been reduced. “Zero. I’m not planning on it,” Jeannotte said.
If anything, the store is hoping to take on one or two more workers who have been laid off elsewhere, Jeannotte said. And part of that is due to the SBA loan the business is hoping to get.
The store first applied last Thursday, he said. They had not been approved as of Wednesday, a day before the loan ran out. Now, that loan could be uncertain for a while.
For Gallagher, the exhaustion of SBA funds mean the line of businesses still awaiting their loans are on hold.
Under the SBA program, the money lent to employers comes directly from the banks themselves – it is not federal money. But the loans are guaranteed by the federal government. Without federal funds the SBA will not approve the loan requests and the banks can’t go ahead with them.
The bank has so far been turning around loan requests in a week. They’ve averaged $100,000 to $150,000 per loan, Gallagher said.
It started April 3, when the loan program first became available. Since then, bank employees have been pulling 10-hour days and working through the weekend, Gallagher said, though the initial rush of applications has died down somewhat.
“We were just jam-packed,” he said.
The loans are geared toward supporting employees. They can be given out interest-free on one condition: that businesses put 75% or more into payroll. The idea, Gallagher says, is to discourage businesses from laying off employees, which could burden the unemployment system, and instead keep them paid while they hunker at home.
It’s a ray of hope for many Concord businesses, said Tim Sink, President if the Greater Concord Chamber of Commerce.
“Those funds are starting to flow,” he said. “I’ve noticed it myself. We’ve spent a lot of time working with businesses, helping them to access either payroll protection funding or the employment security programs like Work Share.”
But not all businesses are poised to take advantage of them. Some, such as restaurants, may have shed their employees already, and other companies may not be getting any work due to the nature of their work, like industrial printers.
Indeed, of the approximately 700 businesses that bank with Merrimack County Savings Bank, only about 400 have applied for the loans so far, Gallagher said. That may be a function of awareness, but more likely there’s a grimmer reason: Many businesses have already shut their doors and carried out layoffs, Gallagher said. For them, a loan for payroll is less useful.
Amid the uncertainty Thursday from the funding lapse, the New Hampshire Bankers Association sent out new guidance to businesses. While the SBA loans are on hold, Granite State banks are still available to help modify loans, defer loan payment, and find new lines of credit, among other services, the group said.
“Although loan applications received by banks not yet submitted to the SBA will not be able to be completed, your bank may be able to help in other ways,” the association said in a statement.
Meanwhile, the group is pressing Congress – currently at odds over the direction of the next funding package – to re-approve SBA funds quickly.
“Banks are united in urging Congress to immediately support additional funding for the PPP program,” the association said referring to the Paycheck Protection Program.
Gallagher agreed. “The simple answer is to just continue to encourage people,” he said. “What we’re hearing is our delegation is working in DC to get this thing moved up another $200 to $300 billion. All we can tell (businesses) is we think this thing will happen, so hang in there.”
In the meantime, Concord businesses are sticking to the one piece in their control: drumming up attention for online sales and smoothing out curbside pickup and delivery.
For Gibson’s, it means a rotation of workers staying home “on call” for future orders and a smaller staff in store to handle sales. For Granite State Naturals, it comes in the form of a big table they’ve put near the parking lot for contact-less pickup.
Customers drive up smiling, greeting an employee in a mask and taking their items. Many of them seem happy to be at the store at all.
“It is giving us time to pause and appreciate these small things that we’ve taken for granted,” Jeannotte said of the crisis. “I have that experience with people all day long when I’m bringing these products out. It is the silver lining.”
(Ethan DeWitt can be reached at edewitt@cmonitor.com, at (603) 369-3307, or on Twitter at @edewittNH.)