Local lenders scrambled with PPP applications, but secured more than $60 million for Lee County customers in first round
BY CHUCK VANDENBERG
JOHNSTON – After a quick first round of small business grants were dispersed earlier this month, a second round of up to $20 million in new grants could be coming shortly.
At Thursday’s regular daily press conference from the state’s Emergency Operations Center in Johnston, Iowa Gov. Kim Reynolds said new guidance from the U.S. Treasury came Wednesday evening.
“The US Treasury has provided guidance on utilizing CARES Act funding, but it is clear we can use it to fund the small business grant relief program through the Iowa Economic Development Authority,” Reynolds said.
She said with that guidance she has asked IEDA Director Debi Durham to immediately start funding some of the backlog of grant applications.
The state received more than $148 million in grant requests in just eight days of the application window that expired March 31.
“So between the (Paycheck Protection Program) through CARES Act and what IEDA has been able to do with small grants, with some guidelines we’ll be able to continue to work through that and see where else we can be helpful to Iowas small business that are hurting due to the COVID illness,” Reynolds said.
On Wednesday Lee County Economic Development Group CEO Dennis Fraise released some details of the PPP payments through county lenders and the Small Business Administration.
Fraise’s information showed six local banks processed more than 400 PPP loan requests totaling more than $60 million. Iowa had more than 29,000 loans approved at more than $4.3 billion.
According to SBA documentation, construction company’s received the largest share of PPP loan dollars across the country with 13.1% or about $45 billion. Professional, scientific and Technical services, and manufacturing were the top three industries in terms of allocation percentage.
Connection Bank President Matt Morris said staff there processed 140 applications totaling $32.5 million in loans in Lee and Des Moines County for their customers.
“We processed applications for all sizes of businesses. From sole proprietors to large employers. We really focused on our customers or those that we had some type of a connection with simply because knowing your customer was a big part of this program,” he said.
“We were concerned about some trying to take advantage of the program by using a bank they didn’t have a relationship with and manipulating the numbers so we really focused on those we knew.”
Morris said information was fast coming on the program and all area banks put in extra time to make sure their customers were taken care of.
“All of the community banks were in the same boat with this program. We were all scrambling to take care of our customers with limited information, but I think all of the community banks did a great job doing what we are supposed to do, and that is take care of our customers and the communities we operate in.”
Barb Smidt, Market President with Two Rivers Bank & Trust said the program had very short turnarounds, but staff there implemented an online platform to accept not only applications but the corresponding documentation to allow for electronic processing.
“Banks were called upon to participate in the Paycheck Protection Program, and Two Rivers Bank & Trust did so in an effort to help our customers and the economy as a whole in these unprecedented times,” Smidt said
“There was a short turnaround time frames with limited guidelines from the SBA, but we were able to implement an online platform to accept applications/documentation and electronically process the paperwork for approved loans.”
Smidt said the loans she helped facilitate were all from employers with 1-100 employees with 85% of her loans for employers with less than 26 employees.
She said she still has applications that were submitted after funding ran out, but has those ready to submit if additional funding is made available.
During a question and answer session Thursday afternoon sponsored by Lee County Economic Development Group, Scott Piper with Pilot Grove Savings Bank said there is a backlog of applications in most banks.
“I think we’re gonna get cranked up here again. We’re thinking probably Monday,” Piper said. “The house will approve it and it will go to the President’s desk. We’re looking forward to serving the next batch that didn’t get served in the first portion of the program.”
Piper said he’s projecting the money will be used up again in less than a week, but Pilot Grove has the backed up applications ready to go.
“We’ve been pretty good about pushing them though or loading them into the SBA system as soon as we get them,” he said. “They’re trickling in every day and I think once new money is approved it will pick up a bit. I do believe there is extra need.”
Janine Clover, Regional Director with the Iowa Small Business Development Center, encouraged those taking out the PPP loans to keep very good records.
“The borrower will need to work with lender to determine forgiveness, but they need to keep very good records. Put those funds, once you get them, in a separate account and draw money as you use it then you can better track what you are using it for,” Clover said.
Piper said it will be up to the customers as to what portions of the loans are forgiven, based on records and solid paperwork.
“I’m not sure banks hold the key to what loans will be forgiven. It’s really the customer’s responsibility to carefully keep good records at this stage,” he said.
“The SBA hasn’t provided any guidance on what exact records they’re going to be expecting and we probably won’t see those for another four weeks. It’s really critical at early onset to really keep good records.”
According to SBA guidelines the loans are 1% loans for eight weeks but are forgivable if a minimum 75% is used for payroll and the remainder on mortgage interest, rent and utilities. The eight weeks start when the funds are received by the borrower.