by John Barbalaco for the NCCPAP Nassau/Suffolk Chapter’s June 2020 Newsletter
Being a banker over the course of the past few months has been anything but dull. When most had a chance to tackle D.I.Y. projects or spend time learning a new skill, the banking industry was tasked with deciphering, extending, funding and eventually forgiving loans provided by the SBA’s Paycheck Protection Program “PPP”. As a small Darien, CT-based community bank our focus is no different than any other Bank our size; serve our market’s retail and commercial customers. One of our main focuses is commercial lending, where we have always approached credit in a conservative manner with credit quality being paramount. The PPP was unchartered territory for the Bank, as it was rolled out in a matter of days with limited details and evolving directions from the SBA, a challenge that persists to this day. However, being a previously approved SBA lender, we felt confident that we could secure these loans for business owners.
We approached the PPP with an “all hands-on deck” mentality as PPP business became our only business during that time. Any Bank employee who had any bandwidth was dedicated to the PPP effort, as it presented a unique opportunity for us. We not only would be helping our existing customer base, but also non-customers who had been shut out by larger institutions. The demand for PPPs was overwhelming and our only reprieve was the exhaustion of the first tranche of funds. For the second round, we scaled up our volume and were raring to go with everyone on the commercial lending team, including the Chief Credit Officer, spending many late nights inputting customer’s PPPs directly into the SBA’s E-Tran system. Admittedly, dealing with this system was frustrating, to put it lightly, with it continually crashing and a snail’s pace speed. However, we remained patient and our perseverance paid off, as the Bank has approved and funded over 250 loans that protected over 4,000 jobs with greater than 80% of the loans extended less than $350,000.
As a lifelong community banker, I have always felt that our ability to react and focus on the matter at hand is our competitive advantage. For the PPP, we steered all of our efforts to this initiative and stepped up for businesses where our larger competitors fell short. Our hope is that people see the benefit and importance of maintaining a relationship with an institution our size to be a great partner through all of life’s ups and downs. For our Bank, this has been a great success, as it has provided us with exposure and access to businesses that it would have taken us years and lots of marketing dollars to accomplish. It is also what has provided me with the opportunity to write this article.
As we move into the forgiveness phase of the PPP, we are continually asked what to do next. For us, like everyone else, this is an evolving process and our thought is a simple; segregate the PPP funds into a designated account, consult your friendly accountant, and make sure to keep good records of what the funds are used for. Sounds simple, but really is the best course of action and makes for an easy review for all involved.
Ultimately, our hope, above all else, is that the PPP accomplishes what it was intended to do and helps businesses recover during an unprecedented time.