Area banks are ready to help with next PPP round
The Daily Record - 1/22/21 | Written by: Gina Gallucci-White
When the Paycheck Protection Program was first rolled out by the Small Business Administration shortly after mid-March COVID-19 lockdowns forced businesses to temporarily close, there were multiple issues.
Money quickly ran out during the initial launch. Some large businesses, like the Los Angeles Lakers, Shake Shack and Ruth’s Chris Steakhouse, received funding that had been earmarked for smaller companies’ survival. (Those institutions later returned the money after public outcry.) During the first days and weeks of the program, the SBA updated the PPP guidelines repeatedly.
Though it was a chaotic rollout on the federal level, regional banks aimed to provide a calming, reassuring presence for their small business clients who desperately needed the funding. Many of those institutions worked over the ensuing months to fine-tune their application portals and processes to make the transaction run smoother.
In mid-January, a new round of PPP began and regional banks are feeling confident.
“You know what is going to help us out a lot in this round is the experience that we have gone through in the first round because it took us (time) getting used to the technology and the platform and the SBA process,” said Augie Chiasera, president of the Greater Baltimore/Chesapeake Region for M&T Bank. “Now that we have one round under our belt, we feel good about the experience of our bankers being able to replicate that in this round.”
The new PPP process began on Jan. 19 for M&T Bank, and nationally the company received around 10,000 applications in two days totaling $1.5 billion in funding. About 15% of the applicants were first-time borrowers.
During last year’s PPP process, M&T Bank’s Greater Baltimore region approved more than 6,800 loans totaling $1.3 billion.
“We have staffed what we are calling a PPP factory made up of internal employees who understand our systems and processes, have deep connections with our front-line branch managers and bankers, and we are poised to follow up on requests when they start,” Chiasera said the day their portal opened. “Really it was a leveraging of the technology we had built in combination with what we are calling the virtual factory for processing these deals that served us well in the first round. We are confident that it is going to serve us well in the second round.”
As part of the program, recipients are asking to have the loans forgiven from last year. The Baltimore region of M&T Bank had processed 3,250 PPP loan forgiveness applications as of Jan. 19. The bank had submitted 2,754 applications to the SBA with 2,134 receiving full funding at that time.
“The process seems to be going pretty well,” Chiasera said. “We’ve had a number of clients seek forgiveness.”
Getting the word out
Banks in the region have utilized several ways to get the word out to clients about the latest PPP round, including through their websites, apps, social media, emails, bankers and branch managers.
Chiasera notes several clients called in advance of the opening of the application window. Many asked staff to refamiliarize them with the PPP process, remind them what documentation was needed and explain the rules so they were prepared.
Howard Bank began preparing for the latest PPP round weeks in advance looking at last year’s process and ways to improve the experience for borrowers.
“We are prepared and we are doing this not just for ourselves but to make sure we are giving our clients a good experience through this (process),” said Jennifer Scully, senior vice president, director of commercial banking administration at Howard Bank. “It is an anxious time, and we want to make sure that we are there for them to alleviate that anxiety but also deliver what they are expecting.”
Scully said the forgiveness process is going well for those that have applied. The bank is having its borrowers use a technology platform to submit their forgiveness applications.
“We are processing them rather quickly,” she said. “… With the borrowers who were obviously most concerned about navigating forgiveness, I think our bankers are well-positioned to help them where they have questions, and we are finding (our process) is proving to be very successful in obtaining their forgiveness.”
Helping with forgiveness applications, too
A week before the SBA began accepting applications, Beth Bavis, vice president of business lending at Point Breeze Credit Union, said officials were prepared to go back to the world of PPP.
“We’ve had lots of interest already,” she said. “Everybody is ready to go.”
She said the forgiveness process is smoother than the first round of applications. “It is a much better portal that the SBA has for this particular part of the process,” she said.
As of mid-January, about 25% of Point Breeze’s clients have applied for forgiveness. “The process seems to be moving smoothly,” Bavis said. “Once we approve it and get it to the SBA, the majority of them have been forgiven relatively quickly. The money has been sent to us and it is pretty seamless.”
Bavis said the low number of applications for forgiveness thus far is because people were waiting for a simplified SBA application that was incoming as part of the latest COVID relief package. “I think most accountants and most businesses were just waiting for that to upload all those documents,” she said. “… So I think we will see an uptick in forgiveness applications now because that is a much more simplified process.”
A complicated process
The PPP process remains a complicated one, so regional banks aim to aid their clients to navigate the process.
“It is helpful to work with a banker that understands the rules and also understands the nuisances of the individual business,” Chiasera said.
Scully said the positive relationship Howard Bank’s staff forms with clients helps to alleviate their concerns and build trust.
“When someone says ‘I need help with something,’ they know that they can call us for that help,” she said. We are able to “ease their concerns about ‘What if I don’t understand? What if I do it wrong?’ Our relationship gives them that foundation to know that we are going to walk them through the process to make sure we help them get (applications) there without them having a great deal of concern. We are their go-to person and we are happy to help them. This is a good feeling for us to be able to be part of delivering this much-needed assistance.”
Point Breeze continues to make the PPP program a top priority.
“It is a short-lived program,” Bavis said. “Our members need this money. It is extremely helpful to them and their businesses and their livelihood.”
The banker/client relationship is important for businesses that need this PPP money.
“It is much nicer to have a partner that does it a lot instead of you trying to figure it out on your own,” Bavis said. “The PPP itself changes often. There is a whole lot of information that comes through on a daily basis. It is just nice to partner with somebody that is seeing all of that information and trying to assist as the changes come through.”