PPP loans infuse more than $9.5 million into community

To the tune of more than $9.5 million, three Holyoke banks have helped facilitate the Paycheck Protection Program in the Coronavirus Aid, Relief and Economic Security Act, administered through the Small Business Administration.

More than 125 loans have been funded through First Pioneer National Bank, Bank of Colorado and Bank of the West. Some have been small, others quite large, but all a huge relief to businesses in the community.

“This is a direct infusion of cash right back into our community,” said Tom Bennett, president of First Pioneer National Bank’s Holyoke branch.

The PPP moneys have proven emotional for a number of business owners who admit they don’t know what they would have done without it. Loans for local people have ranged from $500 to $2.7 million and everything in between.

When President Donald Trump signed the CARES Act March 27, the PPP was set in motion. Because the SBA was involved but didn’t have the resources to handle the applications, the information was given to banks for taking applications and funding, backed by the SBA.

When applications could first be submitted April 3, banks were still getting procedural information. “We were all trying to learn this together, and it was a little bit interesting in that regard,” said Brian Gales, market president for Bank of Colorado in Holyoke.

He added that he, Maddie Eurich and Austin Tharp at Bank of Colorado sincerely appreciated the understanding of the business owners as they worked together to learn the process.

As part of a worldwide bank, Holyoke’s Bank of the West did not submit applications locally. But Deb Williamson, assistant vice president of the Holyoke branch, helped get the word out and provided information in directing clients to the website where they could apply. It wasn’t quite as hands-on, but still significant for local applicants routing through Bank of the West.

Nation goes through first $350 billion quickly

In the initial tier of the PPP, Congress earmarked $350 billion for the revenue replacement program for businesses facilitated through forgivable loans.

However, the program ran out of that initial money in just 13 days. On April 24, an additional relief package was approved by Congress and signed by the president, providing $310 billion more in funding for the PPP.

The PPP funds provided an incentive for employers to keep their employees on payroll or hire them back and also to help maintain cashflow. The premise for a business’s application was two and a half months’ payroll.

Targeted for small business, the PPP provided a great opportunity for businesses, including sole proprietors, farmers, churches and larger companies in Phillips County.

Between the two tiers of PPP funding, local banks continued to gather information for clients to be ready to submit applications again.

Bennett noted that eligibility guidelines were made clearer and even expanded during that time. In addition to Bennett, assisting with the process at First Pioneer were Justin Clevenger, Stephanie Krogmeier, Shelby Kafka, Karla DeBoer, Liz Favela and MegAnn Hadeen.

Set up as a loan at 1% interest with up to two years for repayment, the PPP also includes a forgiveness piece. Loans will be forgiven in full — essentially making them grants from the government — if certain requirements are met.

Loan forgiveness will be based on 75% of the PPP funds being used for payroll-related expenses, while the rest can be used for rent, utilities and mortgage interest.

Businesses, through their banks, will need to apply for the loan forgiveness. It doesn’t happen automatically.

While conceptually a wonderful idea, the eight-week timeline for applying for forgiveness has not given some of the affected businesses a chance to reopen or rehire employees.

Gales noted they’re now waiting for firm guidelines on that forgiveness piece. “We hope it will be simple and clean and not a lot of red tape,” he added.

Williamson also pointed out that people who applied for the PPP but have now determined they don’t need it can return the money and it will go back into the pool for redistribution.

Funds are going fast, but businesses who haven’t had the opportunity to apply for PPP funds should reach out to their local lenders for assistance.