Small businesses in Frankfort have been awarded more than $60 million in federal loans through phase one of the Paycheck Protection Program.
Terri Bradshaw, CEO and president of Kentucky Capital Development Corp., said local banks collectively have made more than 650 loans to local businesses.
“These bank employees worked literally around the clock for 13 days to be sure our businesses got in line first for the PPP loans, and it paid off,” Bradshaw said. “I am so thankful they could help so many businesses, and am certain, with all the glitches worked out now, they can have an even bigger impact in round two.”
On March 27, Congress passed the Coronavirus Aid, Relief and Economic Security (CARES) Act.
The CARES Act is a $2.2 trillion fiscal stimulus package, which included a $367 billion loan and grant program for small businesses.
The Paycheck Protection Program is a forgivable loan program through the Small Business Administration in which businesses with a maximum of 500 employees can receive up to eight weeks of funding for payroll, rent, utilities and more.
On a first-come, first-served basis, the program ran out of money quickly.
An additional $310 billion in federal funding replenished the program April 24.
Mike Feldman, a commercial loan officer at Traditional Bank’s Frankfort office, said despite the guidelines not being “crystal clear,” the process has gone smoothly.
“It’s really critical for these businesses to get as much support as they can,” Feldman said. “The program itself, to be able to provide as many weeks of payroll costs, is really critical for these businesses to survive. But also for these employees to be able to maintain a job, is critical as well.”
Feldman said the businesses Traditional Bank works with that applied for the loan were able to receive their funds within a few days.
“I think every banker would say that we feel the lifeblood of our communities are small businesses,” Feldman said. “There’s not enough support or thanks we could give to them. I think banks are doing everything they can to provide the help and support that’s needed.”
Feldman said that support has required extra hours for bank staff, including working through Easter weekend.
With the infusion of more funds, Feldman said he hopes Frankfort-Franklin County small businesses that weren’t awarded funds in the first round are able to receive some this time.
For Frankfort’s WesBanco branches, the Paycheck Protection Program launch had a rough start.
Bob Cox, vice president, commercial banker and team lead for WesBanco Inc.’s Bourbon region, which includes Franklin County, said a colleague described the Paycheck Protection Program loan learning curve as “trying to build an airplane while flying it.”
Cox said banks usually have longer to prepare for a new loan program, but the launch of the Paycheck Protection Program happened quickly.
It’s been “all hands on deck” at WesBanco since the program’s launch, he added.
“Initially, we were overwhelmed with the demand,” Cox said.
Within a matter of hours on April 3, the first day the program took applications, the SBA portal shut down, Cox added. WesBanco staff worked through the weekend to get things organized and the loan applications submitted.
Cox said businesses with one person on the payroll to businesses with 100 people on the payroll have applied through WesBanco.
“There’s been a great need,” Cox said.
Despite the rough launch, Cox believes the program is well designed and phase two of the program is running smoothly.
With businesses slowly receiving permission to reopen, Cox is concerned that not enough people will wear facial masks and follow social distancing rules. He worries everything will have to shut down again and a third round of funding for the Paycheck Protection Program will be needed.
“Hopefully, people will be respectful and do their part and allow businesses to operate,” Cox said.