Paycheck Protection portal reopens today for assistance
The U.S. Small Business Administration will reopen the Paycheck Protection Program loan portal to small lenders today.
Lenders with $1 billion or less in assets for first- and second-draw applications can submit those applications starting at 9 a.m. The SBA will fully open the portal to all participating PPP lenders Tuesday.
Earlier in the week, SBA began taking applications from community financial institutions, lenders whose customers are minority-owned and economically disadvantaged businesses. Today, 5,000 more lenders can access the process, including community banks, credit unions and farm credit institutions.
“A second round of PPP could not have come at a better time, and the SBA is making every effort to ensure small businesses have the emergency financial support they need to continue weathering this time of uncertainty,” said SBA Administrator Jovita Carranza.
Some local lenders expect applications to be plenty.
Tim Shaffer, interim chief credit officer with Canfield-based Farmers Bank, said he expects most applicants who participated in the first funding round will participate in round two.
There is no real way to anticipate volume, except anecdotally from borrowers, but “if you qualified in round one, why would you not apply in round two?” Shaffer said.
Farmers in round one handled 714 loans for just under $200 million.
Premier Bank, too, tried to gauge interest.
“From talking with local CPA firms and client bases, there is definitely a lot of interest,” said Josh Toot, senior vice president / commercial banking manager with Premier. “I think some of the larger deals maybe won’t be there; obviously the businesses that continue to operate and do well won’t be there because of the 25 percent reduction in revenue, but there is still a lot of interest.”
In this round, businesses that received loans last year will be able to borrow up to $2 million as long as they have no more than 300 employees and suffered at least a 25 percent drop in quarterly revenue. First-time borrowers with no more than 500 workers will be able to borrow up to $10 million.
As with the first two rounds of the PPP, applications must be submitted online at banks and other SBA-approved lenders. All applications must be submitted and approved by March 31. Loan amounts are calculated using a company’s payroll expenses; businesses can use either their 2019 or 2020 payroll to compute how much they can ask for.
He also expects less of a mad dash for funding this cycle, and there has been word from Washington, D.C., the appropriations would be sufficient, said Chad Paul, SBA lender with Premier Bank.
In the first funding cycle, the money ran out in less than two weeks, causing lawmakers to put more money into the program.
“There is very low risk of someone standing with their hand out waiting for funds,” Toot said.
Premier Bank handled more than 2,800 loans worth more than $450 million in the first PPP cycle across its service area in Ohio, Michigan, Indiana, Pennsylvania and West Virginia.
The PPP is being restarted under the coronavirus relief bill Congress approved in late December, providing for $284 billion in new loans. The first two rounds, which began April 3 and ended Aug. 8, gave out more than 5.2 million loans worth $525 billion.
The Associated Press contributed to this story.