Latest Information About the SBA Paycheck Protection Program
Update: May 19, 2020
PPP lending tops $500B with community banks leading the way
Tuesday, May 19, 2020
By Zach Fox
Community banks have approved a plurality of emergency small business loans, with several taking advantage of the Federal Reserve's liquidity facility for funding.
On May 18, the Small Business Administration released the latest data for the Paycheck Protection Program, which provides forgivable loans to keep small business employees on payroll during the COVID-19 pandemic. The data shows $513.27 billion of PPP loans approved through May 16.
The report also broke down approval volume by lender size, showing community banks have accounted for a significantly greater portion of PPP loans than their share of banking industry assets. Community banks, defined as those with less than $10 billion, have processed 43% of PPP loans while accounting for less than 20% of the industry's assets, according to S&P Global Market Intelligence data. Regional banks with $10 billion to $50 billion in assets accounted for 19% of PPP loans, while large banks with more than $50 billion in assets handled 37% of the loans.
Update: April 29, 2020
So your business got a PPP loan - Now What?
The Paycheck Protection Program (PPP) recently implemented by the Small Business Administration (SBA) provided much needed funds for small businesses in the form of loans that may be forgiven, in whole or in part, by the SBA at a future date. However, PPP loan forgiveness is dependent upon compliance with statutory and SBA requirements regarding the use of funds and providing proper supporting documentation. Borrowers should be mindful that any unforgiven portion must be repaid in eighteen monthly payments beginning in the seventh month after the note date. A revised amortization schedule for these monthly payments may be provided after forgiveness of part of the PPP loan.
Please refer to these informative PPP Loan Forgiveness documents for information regarding items needed to document forgiveness eligibility and certification guidance:
Update: April 22, 2020
The U.S. Treasury Secretary Steven T. Mnuchin and Small Business Administration (SBA) Administrator Jovita Carranza issued the following statement regarding the success of the Paycheck Protection Program (PPP):
“The Treasury Department and SBA launched the unprecedented Paycheck Protection Program in just one week. Following its launch, the SBA processed more than 14 years’ worth of loans in less than 14 days, which will protect a vast number of American jobs.
“The PPP enjoyed broad-based participation across the country from lenders of all sizes and a wide array of industries and businesses. From its start on April 3, PPP provided payroll assistance to more than 1.6 million small businesses in all 50 states and territories. Nearly 5,000 lenders participated in this critical program, including significant lending by community banks and credit unions. Nearly 20% of the amount approved was processed by lenders with less than $1 billion in assets, and approximately 60% of the loans were approved by banks with $10 billion of assets or less. No lender accounted for more than 5% of the total dollar amount of the program.
“The vast majority of these loans—74% of them—were for under $150,000, demonstrating the accessibility of this program to even the smallest of small businesses.
“The PPP provided funds to a wide variety of industries in all sectors of the economy, including construction, manufacturing, food and hospitality services, health care, agriculture, and retail, among many others. This demonstrates the broad diversity of PPP and its support for American workers across the board.
“The Paycheck Protection program is saving millions of American jobs and helping small businesses get through this challenging time. We urge Congress to protect millions more American workers and their families by appropriating additional funding to support PPP.”
See Press Release HERE
Update: April 14, 2020
The banking industry is working expeditiously to get the stimulus dollars into the hands of our small businesses. To date, Bank of the Pacific has accepted a total of 490 applications for $121 million to disburse over the next 10 days. That does not take place without the tremendous collaboration, teamwork and leadership demonstrated by our Commercial Lending and Loan Documentation Teams. We are still waiting to see if additional resources or funding will become available in hopes that we may be able to entertain additional applications.
Of Note: The SBA has reported that $247.5B in PPP loans out of $349B total have been approved - over 70% - as of April 13. That amounts to over one million loans through 4,664 lenders, and the construction sector received the largest share to date ($34B).
Around 70% of small business owners attempted to apply for an emergency loan in the first week of the SBA PPP rollout. While 72% were successful in submitting their application, 28% were not, according to a National Federation of Independent Business survey. Most of the business owners who were successful have a checking or savings account with the bank. More than 3,800 lending institutions -- predominantly community banks -- have participated in the program.
Update: April 7, 2020.
As your community Bank, we value the relationship we have as a trusted financial partner and pride ourselves in helping our businesses and communities impacted by COVID-19. Bank of the Pacific maintains preferred lender status with the Small Business Administration and is therefore authorized to participate in the Paycheck Protection Program (PPP) included in the CARES Act. The PPP was designed to provide funding to large sectors of the economy to keep businesses afloat and individuals employed.
Without a doubt, this is an unprecedented and challenging time in our lives. The financial need of our customers is great and the demand for PPP funds is massive. The SBA began taking applications for PPP last Friday. At Bank of the Pacific, we began inputting applications on Friday, April 3rd working diligently throughout the weekend. As of April 6, we had input over 200 applications and received preliminary approval for approximately $70 million in PPP loans, with another 150 applications totaling $40 million in process. Unfortunately, we quickly reached our capacity to participate in the program and are no longer accepting applications.
As you know, we are a local community bank with total assets of approximately $925 million. Our bankers have been working around the clock to process applications. While we are pleased to have been able to help as many customers as we have under these extremely challenging circumstances, we are disappointed that we are unable to continue to help our remaining business customers that may have an interest in the Paycheck Protection Program at this time.
There are other relief programs still available with the SBA included the Economic Injury Disaster Loans and Emergency Economic Injury Grants, Small Business Debt Relief Program, Small Business Counseling, Small Business Contracting and Small Business Tax Provisions. See the Small Business Owner’s Guide to the CARES Act on our website for more information. Additionally, in the state of Washington, grant funding for businesses with less than 10 employees is available through the Working Washington Small Business Emergency Grants.
For those that have received preliminary SBA approval in Phase 1, we will follow up with closing documentation and required certifications. We, like all banks, are waiting for the SBA to finalize guidance including a promissory note that will be required prior to disbursement. If additional resources or funding is made available, we may be able to entertain additional applications. Should that occur, we will do our best to serve our customers and adhere to our values that include positively impacting our communities and commitment to consistently exceed customer expectations. We believe we will know more in the coming days.
President & CEO
You may find the Small Business Owner's Guide to the CARES ACT document HERE