Bankers continue processing second-round PPP funding; see lower amounts requested
UPDATED MAY 7
Since the second round of funding for the Small Business Administration’s Paycheck Protection Program (PPP) launched on April 27, Virginia banks have processed more than 46,000 loan applications for the COVID-19 relief funding for small businesses, totaling more than $3.97 billion as of May 1, according to SBA data.
“All Virginia banks are open, well-capitalized and working tirelessly for small business customers to serve their needs,” Bruce Whitehurst, president and CEO of the Virginia Bankers Association (VBA), said in a statement.
But although Virginia banks are continuing to work to get funds dispersed, bankers say that the volume of applications has slowed during round two.
“It’s not been the tsunami that Round One was,” Jeff Szyperski, chairman, president and CEO of Kilmarnock-based Chesapeake Bank, said. His bank processed more than 700 applications during the first round, but has only seen about 200 requests so far in the second round.
The 11 Virginia-based credit unions that offered PPP loans also processed 1,112 loans, totaling $126 million in the first round of PPP funding, according to the Virginia Credit Union League.
“We recognize these loans are saving jobs, saving livelihoods and ensuring our communities can weather this crisis,” League President Rick Pillow said. “Fortunately, Virginia’s credit unions entered the pandemic stronger than we’ve ever been. We worked one-on-one with business members affected by the pandemic long before the PPP was available, and we’ll continue to do so after the program ends.”
During the first round of funding, the SBA approved 1.7 million loans before the initial $349 billion small-business relief fund ran out on April 16, after just 13 days. Virginia banks made 40,371 loans totaling $8.72 billion during that first round.
Congress has allocated an additional $320 billion in PPP funding for the second round, and banks resumed making loans and taking applications on April 27. By May 1, more than half of those funds had already been loaned, with $175.7 billion committed to 2.2 million loans across the nation.
Small businesses that receive the forgivable PPP loans are allowed to use the funds to meet payroll costs and make mortgage interest, rent and/or utilities payments. Loan will be fully forgiven if 75% of the funds are used for payroll costs, according to the SBA. The other 25% can be used to make mortgage, rent or utilities payments.
What’s weighing on small businesses and banks now, though, is what forgiveness on those loans will look like, something the federal government still hasn’t communicated.
“The big thing we’re waiting on now is definitive guidance on what the forgiveness is going to look like,”…