After two weeks of near-frantic scrambling with new protocols and procedures, the Payroll Protection Program, one facet of the more than $2 trillion federal CARES Act for COVID-19 relief, has exhausted its $349 billion congressional appropriation.
While the program has received mixed reviews on the national stage, several Cordell banks successfully used to program to help their customers secure loans during the current economic crisis.
The Bank of Western Oklahoma was one of the local banks that stepped up to process loans under this new program. Pete Nichols, the bank’s senior vice president at the Cordell branch, said that while adapting existing systems to handle a new program was challenging, overall it was very beneficial to his customers.
“Some of our folks worked long hours figuring out how to make it all work,” he said. “Nationwide $350 billion went through a system, the Small Business Administration, not designed to deal with disasters. But the people aren’t just customers, they are our friends and neighbors and we’ve gotten monies into the hands of our customers who need liquidity right now.”
The program provides federal money to fund Small Business Administration loans to small businesses. These are twoyear loans at a fixed one percent rate, and do not require personal or business collateral for security. There are no payments due on the loans for six months. Additionally, the loans are fully forgivable if the borrower meets the SBA criteria, including a requirement that 75 percent of the loan amount be used to maintain payroll during the COVID-19 crisis.
The program was hastily put together in response to the economic impacts of the pandemic. As is to be expected with a quick emergecy response, there have been some hiccups along the road. Many banks had to adjust their loan processing and approval systems to accommodate the guidelines of the new program, guidelines that were being established at the same time loans were being processed.
Landon Jones with First National Bank in Cordell said the rapid roll-out of the program caused a bit of confusion, but overall it’s been helpful for the bank’s customers.
“It was thrown together so fast, but everyone’s trying to do the best they can,” he said.
Shane Regier, with Equity Bank in Cordell, echoed Jones’ sentiments.
“It’s kind of been the Wild West,” he said. “There have been lots of changes to the guidance as the program developed and was implemented. We were going a little crazy getting our systems to jive with the new guidance.”
Chris Jones, executive vice president with the Bank of Cordell, said his bank has been doing Payroll Protection Program loans from Oklahoma City to Amarillo, and has been pleased with the program despite some of the challenges posed by the short timeline. “Is it a good program?
“Is it a good program? Yes,” he said. “It’s getting money to people who need it. Has it had some bumps along the way? Yes. But overall I would give it a thumbs up.”
While the program reached its $349 billion funding cap on April 16, after less than two weeks of being open, the general consensus - at least among local bankers - is that Congress is likely to appropriate another round of funding for the program. Recent action in Washington supports that assessment.
Sen. James Lankford of Oklahoma earlier this week joined several other senators in calling upon Zonelle Page 2 the SBA to keep its loan processing system open and active while Congress works to appropriate additional funds to the Payroll Protection Program.