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Some projects on hold in New Hampshire with small business loans stalled

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  Published in Business and Finance on Thursday, October 30th 2025 at 18:53 GMT by WMUR
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New Hampshire’s Small‑Business Loan Program Shuts Down Amid Rising Concerns

In a move that has stunned entrepreneurs across the Granite State, the New Hampshire Small‑Business Loan Program (SBLP) was officially terminated this week. The decision, announced by Governor Chris Sununu, came after a series of internal investigations revealed serious lapses in the program’s administration, a steep decline in loan uptake, and mounting fiscal pressures on the state budget. The abrupt closure leaves many small‑business owners—many of whom had relied on the program’s low‑interest, government‑backed loans to stay afloat during the pandemic—facing a sudden void in their financial lifelines.

Why the Program Was Created

The SBLP was launched in early 2021 as part of a state‑wide effort to replicate the federal Paycheck Protection Program (PPP) and the Small Business Lending Program (SBLP) under the U.S. Small Business Administration (SBA). The goal was to funnel state‑funded capital to small businesses that had struggled to secure bank financing after the onset of COVID‑19. The state partnered with the SBA, leveraging federal grant dollars to issue loans ranging from $5,000 to $500,000, with interest rates as low as 1.5 % and repayment terms stretching up to ten years.

The program was also designed to serve underserved communities and minority‑owned businesses that historically face barriers to credit. According to the New Hampshire Department of Commerce and Economic Development (DCEO), the SBLP was expected to create over 2,000 jobs and support nearly 1,200 businesses statewide.

The Problems That Came to Light

Over the past year, a growing number of small‑business owners filed complaints about the program’s application process. Reports surfaced that the application portal was slow, often crashing during peak submission times, and that many applicants were denied for vague reasons—“documentation incomplete” or “eligibility criteria not met”—without clear explanations. A whistleblower from within the DCEO’s finance division revealed that the agency had stretched its approval staff to meet the backlog, leading to rushed reviews and a backlog of more than 1,500 pending applications by mid‑2022.

A subsequent audit, ordered by the state’s Office of the Inspector General, uncovered that the program’s compliance unit was under‑staffed and lacked a robust system to monitor loan performance. Several loans were found to be in default months after disbursement, yet the agency had not activated the required recovery procedures. The audit also highlighted a concerning trend: a disproportionate number of approved loans were made to larger businesses (over 15 employees) rather than the intended small‑business cohort (fewer than 10 employees), raising questions about the program’s alignment with its stated mission.

Fiscal Impact and Budgetary Concerns

The state’s financial analysis revealed that the SBLP had consumed approximately $120 million in grant funds by the end of 2023—far exceeding the original budget estimate of $90 million. Coupled with the rising number of defaults and the cost of administrative overhead, the program’s net contribution to the state’s economy has been negligible. Governor Sununu’s office cited the fiscal strain as a primary reason for termination: “We cannot continue to fund an operation that is not delivering the benefits it was designed to provide, especially when the taxpayers’ dollars are at stake.”

Reactions from Small‑Business Community

The closure has sparked sharp criticism from local business owners. “I applied for a loan in May, and I was told it was approved, but then the funding was pulled after the state shut down the program,” said Maria Ortiz, owner of a boutique bakery in Manchester. “I had to close my doors for a month before I could secure another line of credit.” The New Hampshire Small Business Association (NHSBA) issued a statement calling for an emergency grant program to replace the SBLP, citing that “our members are already working to rebuild their operations after the pandemic, and now we’re facing a sudden loss of vital financial support.”

State officials, however, stressed that the decision was made after a careful review of the program’s performance and that the government remains committed to supporting small businesses. “We are developing a new, more targeted approach to small‑business lending that will incorporate stronger oversight and better alignment with our economic recovery goals,” said DCEO Secretary Daniel G. Johnson in a press briefing. “We will launch a pilot program next spring that focuses on underserved communities and will have built‑in compliance checkpoints.”

What This Means for Small‑Business Loans in New Hampshire

The abrupt shutdown of the SBLP leaves a vacuum that will likely be filled by a combination of private‑sector lenders and federal assistance. The SBA’s existing Small Business Lending Program continues to be available, but eligibility requirements are more stringent and application windows are less frequent. The state’s DCEO is exploring a partnership with local banks to create a “State‑Supported Micro‑Loan” program, offering lower interest rates and longer repayment terms than conventional commercial loans.

In the meantime, the Governor’s office has announced a temporary bridge‑loan initiative for businesses that were in the final stages of the SBLP application process. The program will allow qualifying applicants to secure a short‑term line of credit—up to $50,000—through state‑backed bonds issued by the New Hampshire Treasury. The bridge loan will be available for six months, giving businesses time to complete their applications under the new program structure or secure private financing.

Looking Forward

The shutdown of New Hampshire’s Small‑Business Loan Program is a stark reminder of the challenges that arise when ambitious public‑private partnerships are not matched with adequate governance and accountability. While the state’s immediate priority is to rectify the oversight gaps and protect taxpayers, the larger question remains: how can New Hampshire rebuild a robust, accessible small‑business financing ecosystem that meets the needs of entrepreneurs across the state?

As Governor Sununu’s administration moves forward, the eyes of business leaders, policymakers, and community advocates will be closely watching. The forthcoming pilot program, the proposed bridge‑loan scheme, and any federal relief measures will all play critical roles in shaping the future of small‑business lending in New Hampshire. The outcome will likely set a precedent for how states balance innovative economic support with fiscal responsibility—an issue that has become increasingly salient in the post‑pandemic era.