Still thinking about applying for the Paycheck Protection Program? Well, the deadline to receive a loan is here, it’s today. Borrowers still have some time to apply, since they launched in early April. The SBA has approved more than five hundred eighteen billion dollars in loans.
Instead of being depleted, more than $134 billion remains unclaimed. However, no word was spoken on whether the deadlines are going to be extended if money is still left on the table and what they’re going to do with that money. More than 5000 banks have given out funds, including top lenders like JP Morgan, Chase Bank, Bank of America, and smaller regional banks, also lending billions.
Valley National Bank CEO Ira Robbins answered a few questions that concern small business owners.
Were you surprised that this round of PPP was not completely cleared out?
Absolutely, when they first announced the second phase, our anticipation was that it’d be gone within 5 to 7 days based on the demand that we had seen in the prior round.
What are the issues about the PPP as restaurants and other small businesses have started to reopen, even these restaurants can only operate only 50% of its capacity? But if they extended the program, do you think that they should target it to specific types of businesses, and if so, which types of businesses would you recommend?
They should definitely extend the program without question. This recession had hit many in industries, unlike previous recessions before. At Valley, only 13% of the PPP applicants were in the hotel or restaurant industry, recognizing that this was impacting every small business across the entire spectrum of industry.
So I do believe that it should be extended. I think as we move forward and look to apply the additional federal stimulus. We should absolutely go and apply more PPV funds to many of these small businesses but give them the flexibility we’ve now adopted where it’d be 24 weeks or change some of the payroll restrictions as to what was initially put forth.
How the program went so far? Was it smooth to get the money out to these businesses? Many business owners had a tough time with it, but Senator Marco Rubio has already floated the idea that maybe you take what’s left of the program. $25 billion goes to small businesses that have employees of ten or less. Is there anything that they should change in how the federal government works with you to get the money out if they decide to extend the program?
Let me say right off the bat, and I applaud the federal government for being so proactive. One of the challenges has been for us, and working with the federal government is that the rules continuously change. The first forgiveness application that they send us was 11 pages. Now, it’s down to 3 pages. So for our users to apply for forgiveness has been a real challenge as the program constantly changes.
One ask I would have is that we just leave everything as is. The more complications, the more variables that we apply to, the more uncertainty it produces. It just makes it more challenging for us to connect with our customers, and our customers just want to know that there’s certainty there. Give them a little bit more flexibility to assign and align the payment forgiveness with the reopening that happens in each individual geography In New York and New Jersey, for instance, there is an eight-week time window, so they weren’t even allowed to open many of these restaurants.
Right now we’ve still created hindrances for these businesses to really succeed/ We need to end the program and apply the 24 weeks fully for all these businesses.