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$310 billion more in Paycheck Protection loans still unlikely to meet demand

Lenders say they continue to process completed applications received for the first round of funding.
Small businesses hobbled by the kind of loss of business seen here on Beach Drive in downtown St. Petersburg last month have turned to the new federal Paycheck Protection Program to apply for loans that can be forgiven if the money is used to support their payrolls at pre-pandemic levels.
Small businesses hobbled by the kind of loss of business seen here on Beach Drive in downtown St. Petersburg last month have turned to the new federal Paycheck Protection Program to apply for loans that can be forgiven if the money is used to support their payrolls at pre-pandemic levels. [ BOYZELL HOSEY | BOYZELL HOSEY | Times ]
Published Apr. 24, 2020|Updated Apr. 25, 2020

President Donald Trump on Friday signed a bill adding $310 billion to the Paycheck Protection Program, raising the total being made available to small businesses and nonprofit organizations to $659 billion.

It’s a staggering amount of money, but demand for the aid could again exhaust the supply quickly.

In the first round of the program, 4,975 banks working with the U.S. Small Business Administration made 1.6 million of the forgivable loans before the funding ran out.

Related: Many Tampa Bay small businesses left out as $349 billion relief fund drained in less than two weeks

By comparison, the United States has 30.2 million small businesses. Many more have applied, and many still hope their loans get looked at when the Small Business Administration resumes taking applications at 10:30 a.m. Monday.

Watch for the money to start moving fast.

“I think all this now is really picking up where they left off and starting to process the applications that they already have in hand," said Don Weinbren, a shareholder in the Tampa office of the Trenam law firm who is advising businesses applying for the loans.

Waiting lists are enormous, according to available data.

Take Bank of America, which says it was one of the top 10 lenders in the first round of the Paycheck Protection Program.

It got 390,000 applications for more than $50 billion in loans, bank spokesman Bill Halldin said in an email to the Tampa Bay Times. Bank of America isn’t releasing its totals, but Halldin said it made thousands of loans.

Still, data available from the U.S. Small Business Administration suggests that the bank and other lenders have many more applications in the queue. The federal agency has not released the names of the top 15 lenders in the Paycheck Protection Program, but it has disclosed the total amount of loans for each.

None of the top lenders made more than 40,746 loans, about a 10th of the number of applications that Bank of America received. None made more than $14.1 billion in loans, less than a third of the total demand to Bank of America.

The Small Business Administration says the average loan size in the first round was $206,000. The crowd-sourced website reported Friday that just 8.6 percent of the 16,000 employers that have taken its survey report being approved for a Paycheck Protection loan.

In the Tampa Bay area, recipients include the Columbia Restaurant Group, the Tampa-based AutoWeb car-buying platform, Tampa-based surgical training startup Immertec, and Times Holding Co., which operates the Tampa Bay Times and its affiliate publications. Nonprofits that include Synapse Florida, launched to build tech entrepreneurship, and the Poynter Institute in St. Petersburg, also received loans. (Poynter, a nonprofit, owns the for-profit Tampa Bay Times.)

The loans are meant to cover two months of payroll and other operating expenses and can become outright grants if the money is used to maintain pre-pandemic levels of staffing. But they must be repaid within two years at 1 percent interest if businesses do not keep employees on or fail to hire back those laid off at the start of the crisis.

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Largo pizza shop owner Mike Dodaro first tried to apply for a Paycheck Protection loan through Wells Fargo, where he does his business banking.

“I thought we’d be a shoo-in with them; we do a big volume with them,” he said. But the bank’s processing was held up temporarily by a cap set on its growth as a result of a scandal from a few years ago.

So Dodaro checked with three other lenders, ultimately turning to Achieva Credit Union. There, he secured a loan to support payroll at his two restaurants, which are now takeout and delivery only.

“You’ve got to understand that with 80 employees, you’re responsible for a lot of families,” said Dodaro, 59, who co-owns Mike’s Pizza and Pub and Mike’s Pizza and Deli Station. “I’ve never had a problem worrying about how I’m going to pay my employees or how I’m going to pay my bills. ... It was getting a little scary. I’m grateful (Achieva) stepped up for us.”

Achieva, based in Dunedin, processed about 300 Paycheck Protection loans with the Small Business Administration for a total of $13 million.

Achieva Credit Union chief operating officer Jennifer Galley (Achieva Credit Union)
Achieva Credit Union chief operating officer Jennifer Galley (Achieva Credit Union) [ Achieva Credit Union ]

“This has been the hottest program I’ve ever seen,” Achieva chief operating officer Jennifer Galley said. Achieva is working with applicants who join the credit union as part of the process, and has continued to take applications in recent days. It prioritizes applications that are complete with the required paperwork.

On Friday, Small Business Administration Administrator Jovita Carranza and U.S. Treasury Secretary Steven T. Mnuchin issued a joint statement encouraging participating lenders “to process loan applications previously submitted by eligible borrowers and disburse funds expeditiously. All eligible borrowers who need these funds should work with an approved lender to apply.”

Valley Bank, a New Jersey-based regional bank with a small business lending operation in Tampa, so far has processed 5,500 loans for $1.5 billion. Employers that applied during the first round and did not get a loan approved do not have to apply again.

“We are continuing to plan on first in, first out,” the bank said in a statement to the Times. “We are continuing to process applications in the order of when they are received, and when we have all the necessary paperwork in hand.”

Wells Fargo & Co. said it has mobilized thousands of employees and upgraded its technology as it takes and prepares customers’ loan applications to be submitted to the Small Business Administration for approval.

At Bank of America, Halldin likewise said applicants from the first round do not need to re-apply. The bank continues to work through its process, which includes reviewing documents and verifying information required by the U.S. Treasury.

“We have had upwards of 8,000 people working on the applications," he said earlier this week, “so that we can submit as many as possible when submissions resume.”

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