12.
Paycheck Protection Program Loan
On May 7, 2020, the Company received loan proceeds in the amount of approximately
$2,543,600 under the Small Business Administration (SBA) PPP. The PPP, established as part
of the Coronavirus Aid, Relief and Economic Security Act (CARES Act}, which was enacted
March 27, 2020, provides for loans to qualifying businesses for amounts up to 2.5 times the
average monthly payroll expenses of the qualifying business. The loan and accrued interest
may be forgiven after eight or twenty-four weeks providing the Company uses the loan
proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains
certain payroll levels. The amount of joan forgiveness will be reduced if the Company
terminates employees or reduces salaries during the eight or twenty-four week period.
Any unforgiven portion of the PPP loan is payable over two years at an interest rate of 1%,
with deferral of payments for the first ten months. The Company intends to use the proceeds
for purposes consistent with the PPP requirements. While the Company currently believes
that its use of the loan proceeds will meet the conditions for forgiveness of the loan, the
Company cannot guarantee that the loan will be forgiven, in whole or in part.
Lines of Credit
In December of 2020, the Company’s existing Working Capital Line of Credit (WCLOC) and
Pennichuck Water ‘s FALOC were renewed. The WCLOC was extended and renewed for an
additional year and a half, expiring on June 30, 2022, whereas the FALOC was extended and
renewed for an additional two and a half years, expiring on June 30, 2023. Additionally, as a
part of the renewal and extension of the FALOC, the capacity of that facility was increased
from $10 million to $12 million, while the Company’s WCLOC remains at $4 million.
Pennichuck East’s Fixed Asset Line of Credit (PEU FALOC) was renewed and extended for an
additional three years on November 24, 2020, expiring on September 30, 2023, at its current
facility level of $3 million. The two Fixed Asset Lines of Credit (FALOC and PEU FALOC) are
used to fund construction work in progress on capital projects, which will be refinanced into
long-term term loan obligations or issued bond indebtedness, annually.
Short-term borrowing activity under the Company's WCLOC for the years ended
December 31, 2020 and 2019 was:
(in thousands) 2020 2019
Established line as of December 31, $ 4,000 $ 4,000
Maximum amount outstanding during period 3,006 3,311
Average amount outstanding during period 1,354 934
Amount outstanding as of December 31, 624 2,439
Weighted average interest rate during period 2.47% 3.98%
Interest rate as of December 31, 1.90% 3.55%
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