Applications overwhelm SBA system

Contributed photoThe Bank of Greene County has helped local businesses and non-profits such as the Columbia-Greene Humane Society to secure financial assistance through the SBA’s Paycheck Protection Program. Picture, from left, are Ron Perez, president of the Columbia-Greene Humane Society; Peter Hogan, member of the board of directors for the Bank of Greene County and Columbia-Greene Humane Society; and Perry Lasher, senior vice president and director of Commercial Lending.

The second round of the U.S. Small Business Administration’s Paycheck Protection Program went live Monday but the system was overwhelmed with applications, lenders said.

The initial $349 billion for the program designed to cover up to $10 million of payroll, rent, utility and mortgage costs for small businesses ran out within 13 days after the program went live April 3.

Congress approved an additional $310 billion last week and the state comptroller announced another $50 million would be allocated to the program from the state’s Common Retirement Fund, but lenders aren’t sure how long the funds will last.

“We’ve had over 1,000 applications in a two-and-half-week period,” Bank of Greene County President Donald Gibson said. “Normally our commercial lending group can do 50 loans per month. We’re doing two years’ worth of work in two weeks.”

The Bank of Greene County had to push things into high-gear quickly when their third-party lender backed out April 3.

At the time, the bank was not a direct SBA lender and needed the third party to process the applications, Gibson said.

“We had to scramble all day Friday and Friday night,” Gibson said. “All big banks are only going to process applications for their customers. We’re one of the bigger banks in Greene and Columbia. If we don’t get it, businesses in our markets will have nowhere to get it.”

By the following day, the bank had secured an agreement with the SBA to become a direct lender, Gibson said.

In the first round of funding, the bank approved 522 loans totaling $61 million in funding, Gibson said.

“The head count for jobs retained is some 6,600 jobs,” Director of Commercial Lending Perry Lasher said.

The funding had a great impact on the area, Gibson said.

“That is huge for this area,” he said. “Can you imagine if we didn’t get that $61 million?”

The bank has accepted over 500 applications for round two, which went live at 10:30 a.m. Monday, Gibson said.

“We’re over $100 million with the two rounds,” he said.

Lending staff have been experiencing technical difficulties trying to submit applications since the second round went live, Gibson said.

“We have seven people dedicated to applications and only five were approved during the day yesterday,” he said. “Perry personally checked every half hour and at 1 a.m. found out the portal was working.”

Lasher called a group of lending staff into the bank in the middle of the night, Gibson said.

“We had 75 approved by this morning,” Gibson said, adding that the bank has about 430 applications to submit.

Each time the system crashes, bank staff have to start from scratch, he said.

“I don’t think the SBA portal is built to handle this kind of volume,” Lasher said. “We’re submitting one every half hour to an hour. It’s a painful process.”

Once the bank is notified of the approval, there is a quick turnaround in getting businesses the financial assistance they need, Lasher said.

“We had our credit team here at 8 a.m. this morning working on 10 credit checks this morning for loans we approved last night,” Lasher said.

The turnaround time, after receiving approval from the SBA, is about 72 hours, Gibson said.

Gibson encourages businesses and nonprofits to get in their applications, he said.

“I would say if they have not done it yet, to get it in ASAP,” Gibson said. “There is nothing more important they can be working on right now. The money is probably going to run out within a few days. They did a second round, but I wouldn’t count on a third round.”

The state comptroller’s office is exploring the option of allocating another $100 million from the state Common Retirement Fund toward the Paycheck Protection Program, according to a statement.

“New York small businesses are facing unprecedented challenges that have put more than a million men and women out of work,” state Comptroller Thomas P. DiNapoli said in a statement. “We’re doing what we can to help small businesses keep employees on their payroll, even if they may have paused operations. PPP loans are critical to New York businesses trying to survive through this public health and economic crisis. We are continuing to look for opportunities to help New Yorkers that are consistent with our fiduciary responsibility to the pension fund.”

The Common Retirement Fund is the public pension fund for more than one million state and local government employees and retirees, and their beneficiaries.

The National Bank of Coxsackie has approved 273 applications, 64 of which were in the second round of funding, Vice President and Human Resources Officer Nicole Bliss said.

The bank also has many applications that are “queued up,” meaning they are completed but have not yet been submitted to the SBA, Bliss said.

Bliss echoed Gibson’s advice.

“If they haven’t applied, I would encourage them to get an application in,” she said. “We were one of the earlier banks in the area to start processing them. Our staff worked for eight or nine days straight; we have really mastered the program at this point. Even if funding runs out, I would still get an application in in case they open it again.”

The bank is not limiting applications to customers, Bliss said.

“We are not limiting this to only our customers,” she said. “It’s important to get this funding into the community, whether they’re a customer or not. We want to make sure local businesses get what they need.”

Businesses can review a list of what is needed to apply on the bank’s website and submit an application via email, Bliss said.

Other local lenders include NBT Bank, KeyBank, M&T Bank, Pioneer Savings Bank, Citizens Bank and Trustco Bank.

Liam Singer, owner of Hi-Lo and Avalon Lounge, was among the businesses to apply through the Bank of Greene County.

“We managed to get a PPP loan through the Bank of Greene County,” Singer said. “That happened very quickly, mostly due to the hard work of the folks at the Bank of Greene County.”

Singer also applied for an Economic Injury Disaster Loan through the SBA and received an advance on Monday, he said, about a month after he applied.

Funding for the EIDL program also ran out and Congress awarded another $50 billion to the Disaster Loans Program and $10 billion for Economic Injury Disaster loan grants last week.

Through the EIDL program, small businesses can apply for up to $10,000 in relief.

Columbia-Greene Humane Society was among the nonprofit organizations that applied for the Paycheck Protection Program, President Ron Perez said.

“We have a big commercial arm at the humane society that pays for charity, like our grooming and boarding services, and our vet clinic, which we’ve had to close down,” he said. “As a result of that, more than half of the staff would’ve been laid off.”

Perez reached out to Lasher about the program, he said.

“This bank really took a local leadership role and helped a lot of local businesses navigate through this,” Perez said.

Perez has been able to retain his staff and has employees rotating shifts, he said.

Adoption and surrender services are still available, Perez said, adding that the shelter’s food bank has been extremely busy.

Perez also applied for an EIDL about a week ago, he said.

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