Patience and simplicity help in PPP process
BY MICHELLE COONS
As we approach the one-year mark of the pandemic in the United States, calling the last 12 months unprecedented would be an understatement.
The world has been turned upside down and the banking and financial industry has been faced with immense challenges in implementing nationwide programs to help businesses and individuals. But with those challenges have come remarkable opportunities to connect in meaningful ways with our clients. As we progress into 2021, those opportunities are going to continue, and I absolutely believe we look forward to much brighter days ahead. FIRST DRAW PAYCHECK
PROTECTION PROGRAM LOANS: In March, Congress passed the CARES Act to provide $2.2 trillion in stimulus to the economy. The legislation included the Paycheck Protection Program, which through the Small Business Administration supplied more than $525 billion in potentially forgivable loans to struggling businesses. During the first round of PPP loans, WaFd Bank supported 6,588 businesses across its eight-state footprint and extended $782 million in PPP loans to clients through the SBA. In New Mexico alone, WaFd Bank approved 674 PPP loans totaling $59.4 million with many of these loans being for customers new to WaFd Bank. PAYCHECK PROTECTION PROGRAM
FORGIVENESS: Quoting one of my branch managers, Brandy Murphy, “Yes, there have been learning curves on both sides, but to be able to call a client and let them know that their loan has been forgiven pushes me daily to continue to work hard for all our clients. It gives me joy to wake up every day, come to work and know that I have the opportunity to help businesses in need.”
As of (last) week, 49% of our PPP First Draw clients have applied for forgiveness and 73.5% of those loans have already been forgiven; 98% of the loans forgiven received complete forgiveness and only 2% were partially forgiven. PPP First Draw clients still have up to 10 months after their covered period to apply for forgiveness.
For the second round of PPP funding, WaFd Bank New Mexico is focused on supporting its existing clients who need additional funding to weather the pandemic. As of early this week, the SBA has only disbursed $34 billion of the $284 billion available which is at a much smaller rate when compared to the PPP First Draw when the SBA went through $350 billion in two weeks. Consequently, it appears that there is going to be plenty of funds available for applicants who meet the new Second Draw requirements. WORDS OF ADVICE ON YOUR SECOND DRAW PPP APPLICATION:
Be patient – Second Draw PPP loans ■ are still a work in progress that is being tweaked every day. The SBA is currently taking more than three days to approve and assign an SBA number, which is different from First Draw where an SBA number was assigned immediately at the time of bank submission. This change has been made for compliance reasons and to reduce fraud. The SBA is also still undergoing several updates to their portal each day as different situations arise.
Don’t make Second Draw more ■ complicated than it needs to be. Per my commercial banking manager, Joshua Smith, “If a borrower reads the SBA guidance, the Draw Two payroll calculation and qualification is straightforward and easy to follow. A straightforward application allows the bank’s underwriter to be more efficient in turning it around and submitting it to the SBA.” Much of your information submitted during First Draw can also be used again in the Second Draw application.
Perhaps the greatest lesson learned during the pandemic has been a deeper appreciation for New Mexico’s resilient communities, strong work ethic and their ability to come together.