Banking on local business

The Paycheck Protection Program (PPP), was the biggest component of small business relief included in the $2 trillion Coronavirus Aid Relief and Economic Security (CARES) Act passed and signed into law on March 30. (See “Local banks invest in their communities” on page 5 of the April 15 Saratoga Sun.)

“It is a great program,” Scott Thayer, RNB State Bank Rawlins Market President said. “It can help our small business customers and non-profits during this unprecedented period and it was extremely popular when first put forth.”

Thayer is right.

The program proved so popular when it was first rolled out, the $349 billion funds guaranteed by the Small Business Administration (SBA) were depleted in a matter of two weeks. This left many small business applicants in Wyoming and the nation out in the cold.

Wyoming small businesses received funding for a total of $837,018,410. There are a total of 66,653 small businesses in the state and 7,618 received PPP loans. This means 11.4 percent of Wyoming’s small businesses receive funds from this program.

This percentage was higher than the nation’s average of 5.7 percent, ranking the state number 4 out of 50 states and Washington, D.C. California had the lowest percentage at 2.8 percent with almost 113,000 of the small businesses getting loans compared to the 4 million that are in the state.

Although the PPP was put on a pause after overwhelming demand due to the impact COVID-19 had on businesses, a second round of funding consisting of $310 billion was approved by Congress on Friday, and the SBA began accepting applications this past Monday.

The second wave of applications has not made it easy on local lending institutions as they try to get through to the SBA website and upload the requests.

Thayer said it has been difficult to upload the applications because the SBA site has been crashing.

“It certainly causes anxiety to have the site crash while uploading, but we are committed to helping our customers, so we keep going at it,” Thayer said.

Copper France, Bank of Commerce Director, had similar thoughts on the SBA website crashing.

“It is frustrating to get an application half loaded and then the site goes down and you are back at the beginning,” France said. “But we are doing the best we can and it is all about patience.”

Both Thayer and France said it was worth all the anxiety to help their customers, because they know how important it is to small businesses if they get approved.

The PPP is a small business relief program aimed at providing businesses in the U.S. with eight weeks of funding assistance through federally guaranteed loans backed by the SBA.

According to the Treasury Department, the loan will be forgiven if it is used to cover payroll costs, mortgage interest, rent, and utility costs over an eight week period. All employees and compensation levels must also be maintained.

The PPP is mostly tied to payroll costs and covers employees earning up to $100,000 per year. A business can apply for 2.5 times its cost of payroll. The funds are meant to be used for 75 percent payroll and the other 25 percent for operational expenses between the time frame of February 15 and June 30, 2020.

Businesses with 500 or fewer employees–as well as non-profits, independent contractors, and the self-employed–who have been impacted by COVID-19 are eligible for the loan program.

A business can apply for the program through any lender approved by the SBA. A business will need to submit a request for loan forgiveness from its SBA lender.

“I am glad the SBA is able to do this second round of funding,” Thayer said. “It is including funding for hospitals this time and being a bit more specific on how funds go to the different size lenders.”

France is also happy that there is a second chance for small businesses that didn’t get in on the first round of funding.

“This is why I encourage businesses to bank with local lenders,” France said. “We know the community and that means we probably know your business. We have a vested interest to make sure a local business succeeds versus a corporate bank.”

Both France and Thayer agree their local banks are doing everything they can to help their customers during this time when so many businesses are dealing with closure.

“We know the people in Carbon County are good people and they deserve to be helped,” France said. “Local banks are what built America. Now, around here, the local banks are going to do their best to save the local businesses. It may require patience, but we will make every effort to keep a customer out of danger from closing permanently.”