Local lenders, businesses tap into SBA Paycheck Protection Program loans

4 min read251 views and 10 shares Posted May 5, 2020

One of the resources for small businesses affected by measures to mitigate COVID-19 is the Small Business Administration (SBA) Paycheck Protection Program (PPP). It provides cash-flow assistance through federally guaranteed Small Business Administration (SBA) loans administered by banks and credit unions. If the employer maintains payroll, the portion of the loan used to cover employee salaries and other limited expenses will be forgiven, as long as some stipulations are met. One of those stipulations includes directing 75 percent of the loan toward payroll.

Read More: County businesses tap state, federal relief programs to cope with COVID-19

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Part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the first round of PPP funding provided $349 billion in relief to small businesses nationwide. The first round was available at the beginning of last month, and funds lasted about a week. In the final week of April, a second round of $320 billion became available.

Several area banks and credit unions worked with local businesses to secure funding through the program. One of the businesses that received funds during the first round was Lebanon engineering firm Steckbeck Engineering & Surveying.

Although Jeffrey Steckbeck, president of the firm, declined to disclose the amount that was received, he did indicate that 100 percent of the funding will be used for payroll, rent and utilities. He told LebTown that even though the office has been closed since March 18, the firm’s 23-person staff has been continuously on payroll and will remain on payroll through the shutdown.

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“We do not envision a need for any furloughs through the end of 2020,” Steckbeck said. He added that in early March steps were taken to equip each employee with their own home office work station, and to relocate their computer systems to their home offices.

Software was installed on each computer that allows employees to log into the server from their homes and work on all projects remotely. Steckbeck Engineering’s five-person management team holds a virtual meeting three times each week, and virtual meetings are held with clients.

“Engineering computing and drafting across an internet network is significantly slower than the direct hard-wiring in our office, so efficiency has dropped to approximately 75 percent of our normal production,” Steckbeck explained. “This means we will be working at a loss of profit, but will continue to operate full time nonetheless.”

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The most important thing, he said, is that employees’ livelihoods are secure and client needs are being met.

Here’s how local banks are participating in the program.

Jonestown Bank & Trust

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Jonestown Bank & Trust (JBT) secured 59 PPP loans for a total of $4.2 million during the first round, according to CEO Troy Peters. The second round saw those numbers rise to 128 loans totaling $10.9 million as of April 22. Peters said the funding affects over 2,350 employees at those companies.

“We were able to guarantee a paycheck for those 2,350 families,” he told LebTown.

JBT was not always an approved SBA lender. The bank went through the approval process during the the first PPP round.

“We started at ground zero, so there was a learning curve for us during the first round. The second round went smoother for us since we knew the system, and SBA made some adjustments in the system,” Peters said. “I feel really good about what our team was able to accomplish.”

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Peters said JBT worked exclusively with its existing customers during both rounds. However, if the bank received an application from a business that was not a customer, it was forwarded to a broker who could then find a bank to work with the business.

“We wanted to make sure our customers and our community were served,” Peters said. “That’s our top priority.”

“The banking industry in general was caught off guard by the quick launch of the PPP. The short notice and lack of solid guidelines for the program had most banks learning and adjusting as the program unfolded,” said Jim Rovito, fair lending officer at First Citizens Community Bank. “As a community bank, customers had direct access to their lenders which, according to many customers, made all the difference.”

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First Citizens Community Bank

First Citizens Community Bank processed 422 loans for over $47 million during the first round, and secured an additional 142 loans for $5.7 million during the second. Rovito said all of its customers who applied for funding received it. He credited the bank’s staff for their efforts in working together to ensure customers had the opportunity to take advantage of the funding opportunity.

“Some customers needed more assistance than others and did not have everything completed before SBA closed the first round of the program,” Rovito explained. “We continued to work with every customer in that situation and had a group of loans ready to be submitted when the program reopened. They did not have to reapply.”

For the second round of funding, First Citizens continued to work with existing customers who need hands-on assistance. However, due to the high volume experienced during the first round of funding, the bank revised its process. It worked with a third party provider, NYMBUS SmartLenders, to collect and process applications for both customers and non-customers to automate the application, approval, and funding processes.

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Fulton Bank

Fulton Bank is also an SBA lender. Laura Wakeley, Fulton Bank senior vice president corporate communications manager, told LebTown that throughout the bank’s five-state service area, the bank helped secure $1.7 billion in funds in the first round for 6,469 businesses and nonprofits. She said Fulton staff was communicating with customers about the program before the first round of the program was even deployed.

In the second round, as of April 29, Fulton secured $2.7 million in PPP funding for an additional 2,700 customers.

“When the money for round one was depleted, we still had 800 to 900 customers in our system that had applied,” Wakeley said. “We kept working with those customers, and when round two opened up, we were able to secure funding for them.”

Fulton worked exclusively with existing clients in the first round, but opened its doors to new clients in the second round.

“We needed to take care of our customers first, but we’re trying to help as many businesses as possible,” she said.

Wakeley explained that Fulton trained and redeployed staff members to prepare for the program.

“At one point, we had over 500 people working on some aspect of the PPP. Some were from our loan departments, and some were from other areas. We really tried to get our customers loans approved,” she said. “We know how important it is not just to our customers, but also to their employees and their families.”


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Full Disclosure: Jonestown Bank & Trust Co. is an advertiser on LebTown. LebTown does not make editorial decisions based on advertising status and advertisers do not receive special editorial treatment. Learn more about LebTown’s advertising program here.

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