Local bankers: Businesses should apply for PPP despite rocky rollout

By  | 

WACO, Texas (KWTX) Glitches plagued the second round of emergency funding for small businesses Monday.

Glitches plagued the second round of emergency funding for small businesses Monday. (MGN)

"It started to sound and look a lot like the rollout of the first round of PPP funding, which was flawed and full of errors," said Travis Kemp, SVP/Chief Lending Officer for TFNB.

Although the Paycheck Protection Program portal opened earlier than it's scheduled time of 9:30 a.m. CST, the latest round of federal assistance to distribute an additional $310 billion to keep businesses afloat and workers employed during the COVID-19 crisis, was, like the first rollout, disorganized, industry officials say.

"What we discovered (after about an hour of submitting applications), maybe in the next half-hour or so, the system crashed, so it started to smell a lot like the first round except this time they had plenty of time to prepare for it," said Kemp. "We've discovered since then it, it's not a system error with SBA, it's 'pacing' they are introducing into the process."

In an attempt to even the playing field among various-sized lenders, the Small Busines Administration added new guardrails to the massive intervention program, limiting all banks, big or small, to submit applications at the same pace per hour.

Kemp said to think of it like 'crowd-control.'

"They are basically governing the number of applications that can be uploaded at any given time, so these aren't system outages," said Kemp. "It's just the SBA's way of 'tapping the brakes', so to speak, of the upload process."

Experts say working with smaller, community banks--which have been able to grab more money relative to asset size than larger lenders thanks to looser regulations--may be the way the best way for small businesses to get a piece of the pie.

"How it impacts Central Texas would be: there's no earmark of how much funding needs to go to each state or county, it's open to anybody on a first-come, first-serve basis," said Kemp. "If it weren't for the pacing piece, we would be uploading like mad."

Kemp says they've received about 350 total applications so far: 165 of them were approved in round one, and TFNB is attempting to submit roughly 130 this time around.

"It's another opportunity to get some funding from the government to try to help keep your people paid while the mandatory gov shutdown is in place," said Kemp. "If you missed the first round, that's okay, you've got the second round."

However, while businesses can apply to get funds until they runs out, experts say the $310 billion pot may be empty within 48-hours.

Kemp says small businesses should still apply because further rounds of funding haven't been ruled out and there may be additional programs to qualify for.

"Funding hasn't run out yet, I recommend, as fast as you can, reach out to your local bank and start the application process with them," said Kemp. "In the event the funding does run out, the SBA still has other loan programs that may be available and you may qualify for something."

The most important thing, he says, is to hang in there.

"Having a good relationship with your banker could be your lifeline and be the difference between your business making it through these government mandated shutdowns and you surviving and coming out clean on the other side," said Kemp. "We're all in this together."