LOGAN – On Tuesday, Congress approved an additional $310 billion in funding for the Payroll Protection Program (PPP), a loan program intended to shore up small business payrolls. Those funds were claimed within two weeks of being available and there is wide speculation that this latest round may not last very long either. But for those businesses or independent contractors who did not get their share of the funds the first time, Cache Valley Bank is offering help, even if the business does not actively bank with them.
Cache Valley Bank CEO George Daines says his bank processed more than 3,800 applications in the first go around (accounting for approximately $575 million to local small businesses and 18% of all applications in the state of Utah) and is positioned to help any small business or non-profit organization still needing to process an application.
“Once we got all our own customers done, we opened it up for anyone else that needed assistance or were having difficulty,” Daines explains. “We had quite a flood of people that came who didn’t have a bank or some other problem had occurred. And that’s really where we’re sitting at this point.
“As we go into the second round, we’ve taken care of everyone at Cache Valley Bank…but the bulk of our capacity can be used to help people who don’t have anywhere else to go.”
Daines says the bank had applications from $654 all the way up to the maximum amount allowed, close to $9 million. But the majority of the applications were for less than $30,000.
Craig Maughan, a PPP project manager at Cache Valley Bank, says the bank could either process the applications themselves, or get some help. They decided to utilize local Certified Public Accountants to ensure the applications are filled out properly and to give more small businesses opportunities to apply.
“For every one that the bank prepares, we are able to submit five or six to the (Small Business Administration) that accountants prepare,” Maughan explains. “We spend less time reviewing and we spend more time submitting to the SBA. When they come through from an accountant, they’ve crossed every t and dotted every i. That’s been, what we think, a real victory for us and a win-win partnership with local accountants.”
The accounting firms can help businesses and non-profit organizations understand what information is needed to qualify for the forgivable loan. Cache Valley Bank pays the accountant to prepare the application so small businesses don’t have to.
Tyler Obray, also a PPP project manager at Cache Valley Bank, says there is some urgency to get an application filed before this latest round of funding runs out.
“It could be three days, it could be a week,” Obray exclaims. “It’s going to go fast. What we’re seeing…in this second round, and we’re appreciative that Congress funded it again, the second round applications are much smaller and a lot more of the three, or four, or five employee-type companies that are really struggling right now. I think it will go at least a week because it will take more work to get the small businesses through so the money will last a little longer.”
If an application had been approved in the first round of funding, but the business did not receive any money because the funds ran out, they will need to reapply.
“The SBA is not allowing a queue at their portal,” says Daines. “A bank may have a queue, but the SBA simply shut the window and would not accept any applications.”
The bank began accepting applications again and is submitting them as they are received, without any preference whether the business does banking with them or not, or based on the size of the business. All applications with Cache Valley Bank will be taken care of on a first come, first served basis. Obray says that during the first round of funding, it was an all-hands-on-deck effort to get as many small businesses taken care of as possible.
The loan is intended to provide working capital to businesses as well as to cover payroll costs, costs related to continuing group health care benefits, mortgage interest payments, rent payments, utility payments, interest payments on other debt obligations incurred before February 15, 2020, and refinancing any SBA Economic Injury Disaster Loans made between January 31, 2020, and April 3, 2020.
There is a processing fee and interest attached to each loan. The loan is eligible for forgiveness when its proceeds are spent on the previously mentioned expenses within eight weeks of receiving the loan and 75% of those expenses have to be documented as going to payroll costs. Any portion of the loan that is not spent within that eight week period or for the right purposes must be repaid over two years with a 1% interest rate. Cache Valley Bank has been releasing the processing fees to CPAs for their assistance in submitting the applications so business owners wouldn’t have to. But any interest on the loans will be donated to local care providers in Cache Valley, Central Utah and Southern Utah.
“We’ve agreed,” Daines says, “that in the communities from which we receive these loans, all of the interest that is earned by Cache Valley Bank will go back to help providers in those communities, hospitals, health departments, whatever.”
Daines says there would be a preference that those donations be spent on something tangible that could be used in any future health crisis.
Additional details are available on the bank’s website: www.cachevalleybank.com/resources.