Paycheck Protection Program kicks off Friday, local banks to hand out millions in loans

Banks in Poplar Bluff today said millions of dollars in funding for local small businesses will be handed out in the coming days and weeks, part of the federal government’s new CARES Act to keep the American economy going.

A conference call Friday morning, hosted by the Greater Poplar Bluff Area Chamber of Commerce and Commerce Bank, gave local small business owners the opportunity to learn what resources are available to them under the new $2 trillion Coronavirus Aid, Relief and Economic Security Act.

“There are a lot of unknowns out there,” said chamber President Steve Halter.

Several people have contacted him lately, Halter said, trying to find out what they needed to do to get enrolled in the new program.

Essentially, Halter said, the “federal government wants you to keep people employed, and if you’re not paying your people, you’re not going to have access to the funding. It’s about keeping people employed.”

Kenneth Rowland, community bank president at Commerce Bank in Poplar Bluff, explained the Paycheck Protection Program portion of the CARES Act, which began Friday.

“The U.S. Small Business Administration is mandated with delivery of the CARES programs,” Rowland said.

The Paycheck Protection Program, he said, is a “handout to businesses that have payroll,” with $350 billion available nationally.

The first step of the process, Rowland said, is for business owners who wish to participate to collect their payroll information and apply for a PPP loan through their bank.

Applications can be submitted through June 30.

The bank would then make contact with the Small Business Administration to process the application. If the SBA approves the loan, the bank then would dole out the funds to the applicant in the amount of two and a half times their average payroll.

“This is not your typical loan processing,” Rowland stressed. “It’s going to come down to the Small Business Administration, but the turnaround should be pretty quick.”

The time to receive funds, Rowland said, would vary depending on each individual bank. Some could hand out checks within a week, while others may take a little longer.

“Be patient with your bank as you move through the process,” Rowland said.

A separate part of the program would allow business owners to apply for loan forgiveness eight weeks after the origination of the loan.

“For eight weeks, you’ll need to collect your expenses, and at the end, you can apply for debt forgiveness,” Rowland said.

In the forgiveness program, 75% can be from payroll costs, and up to 25% can include costs for rent, mortgage expenses, utility bills and the like.

Some business owners, Halter said, have told them they have cash reserves available and don’t need a government loan. However, he cautions nobody knows how long the current pandemic will last and those reserves may not be enough.

“We want all small businesses in this area to take advantage of this,” Rowland stressed.

A separate program, called Economic Injury Disaster Loans, also is available to provide up to $2 million for working capital, and a $10,000 advance is available. Businesses who wish to take advantage of the EIDL program must apply directly through the Small Business Administration.

At his own bank, Rowland said, he has a “large pipeline of requests” for the Paycheck Protection Program and hopes to be handing out money to businesses within 48 to 72 hours.

At Sterling Bank in Poplar Bluff, President and CEO Scott Spencer said it’s too early to tell just how much money will handed out to local businesses and his bank is receiving a lot of calls about it, but he said his “teams have been working as hard as they can. We’re submitting applications as we speak and are trying to help as many customers and the community as we can.”

Spencer said he hopes local businesses will take advantage of the PPP program.

“I hope anyone who qualifies and can benefit from the program uses it,” he said.

At the Bank of Missouri, Community Bank President Kevin McCormick said, no estimate is available for a dollar amount to be given out, simply because it “depends on if an organization or business applies for it.”

There are no obvious negatives to applying for a loan, McCormick said, and he expects the process to go “pretty smoothly.”

Greg Steffens, president of Southern Bank in Poplar Bluff, said he doesn’t have specific numbers for Poplar Bluff, but his company as of mid-day Friday had more than $50 million in loans throughout its 50 locations, and he expects that number to rise to at least $100 million.

The application, Steffens said, “is pretty simple” for businesses to fill out and doesn’t take a lot of time.

“The challenge is entering the information into the SBA’s PPP system and getting an SBA loan number reserved,” he said.

“Peoples Community Bank expects to fund over $5 million into our local economy on Friday and Monday to help these small business during this pandemic,” said President Keith Willcut. “We are excited that this program rewards local businesses for keeping their employees compensated during this recession. We are funding these as quickly as possible to put the money into the hands of the small business owners. We have spent all week preparing for the opening day because many of these business are severely affected by the shut down and time is as of the utmost importance.”

Attempts to reach other local banking facilities for comment were unsuccessful.

Business owners who want to participate or have questions are urged to contact their bank directly.