April 06, 2020

CEO Message: Thank Your Local Banker

If the COVID-19 response has shown us anything, it is that our nation is full of heroes. Be they teachers, healthcare professionals, police and fire first responders they deserve our praise and support. Likewise, so do any number of people who go out to do their work because it keeps us fed, keeps food in stores, keeps people calm, and make it possible for the rest of us to stay home and distance socially.

To that list, I’d like to suggest you add your local banker. I know the profession of banking (like attorneys and politicians) is not one that instantly garners the sympathy and support of many in the United States. In particular, the large national finance managers have given us all reason in the past to be frustrated with the profession.

But your local banker is a very different kind of finance professional. They live in our community, their kids go to our same schools and play on the same sports teams. When those teams need a sponsor, banks are often the first organizations people ask, and are the first to line up to contribute. Our local banks have been some of the leading donors when it comes to funding the non-profit organizations. The same non-profits who now find themselves on the front lines of the COVID-19 response.

And last week came the real-world implementation of the CARES act. Your local bankers have spent the previous week, and the whole weekend, getting ready to help your favorite bar, restaurant, or business owner access financial resources to help.

The CARES act, was signed into law on March 27. One week later, on April 3, banks in your local community were designated by the CARES act and the SBA to be the access point for $350 million of Federal aid through SBA backed loans. The Payroll Protection Program (PPP) is now getting the most interest and attention as a means to keep businesses open and keep people working as long as possible.

What you may not know, is that SBA loans under the PPP (and all other traditional SBA loans) have always been regular bank loans. In other words, when your business applied for the standard SBA 7a loan, you did so with a financial institution, and it was that bank’s money you received for your business use. It was that bank you paid back the principal with interest. The SBA mostly only got involved if the loan could not be repaid, and put some guidelines in place the bank had to follow – like a maximum interest rate.

The is the same case with the PPP. The CARES act basically has asked your local bank to give out loans quickly. So quickly that many of the guidelines were only released on April 3 – the same day banks were asked to process applications.

So now, one of the largest business support programs the federal government has ever instituted begins with your local bank extending a loan, which may at some point in the future be forgiven (repaid to the bank by the federal government).

My point is this. I’ve been on the phone nearly all week with bankers attempting to better understand how to advise businesses that ask the Chamber “how do I apply, where do I apply, and how soon can I get a forgivable loan?”.

After speaking to several local bank leaders this week, I want our whole community to know how hard they are working on it – often with limited information and resources. Our local banks are businesses, yes, but these leaders are also motivated by a strong desire to help our community. They want to get our city and our nation back to business as soon as it is responsible to do so just like all of us. Right now they are working hard to figure out how to give the SBA the information it needs so your business can get a PPP loan as soon as possible.

To our local bankers…Thank you!


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