Life on the front lines of the federal government’s small business loan program
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Community banks participating in the federal government’s Paycheck Protection Program for small businesses have faced unprecedented challenges in the past few weeks.
Laurie Stewart, president and CEO of Sound Community Bank in Seattle told “Marketplace” host Kai Ryssdal that her bank received five times the amount of demand for the federal government’s small business loan program than they had anticipated.
“We did not have a good grasp of how many small businesses would just be starving, literally starving for this funding,” she said.
The Small Business Administration processed 1.6 million loans in the first two weeks of the program. According to a press release, nearly 20% of them were processed by financial institutions like Sound Community Bank with less than $1 billion in assets.
“We made 300 loans in two weeks,” Stewart said. “For a bank our size, you know, we could go six months and make 300 loans. So it was just a huge step up in throughput,” she said.
That meant long hours for Sound Community Bank’s employees, many of whom are working from home.
“One of our bankers sent me an email message at 11:30 at night during that first round of approvals and said, ‘I got to 20 million. I’m going to go to bed so I can get up and do it all over again,’” Stewart said.
But last week, when the $349 billion originally allocated to the Paycheck Protection Program ran dry, Sound Community bank still had 293 would-be borrowers in the pipeline.
“That’s what breaks my heart,” Stewart said. “Almost exactly the number we made were the number that we had to say — and this is the hardest part of my job I think I’ve ever had in my entire career — was ‘I’m really sorry, the money’s gone.’”
Despite that, Stewart said she’s hopeful that Sound Community Bank will be able to start making Paycheck Protection Program loans again soon.
“I’m still thinking positively that there will be additional funding,” she said. Congressional leaders said Monday that they’re nearing a deal on another economic rescue package that would provide additional funding for the program.
COVID-19 Economy FAQs
It’s still the question on everyone’s minds: What’s going on with extra COVID-19 unemployment benefits?
The $600-a-week payments have ended, officially, as of July 31. For now, there is no additional federal pandemic unemployment assistance. House Democrats want to renew the $600 payments. Senate Republicans have proposed giving the unemployed 70% of their most recent salary by this October, when state unemployment offices have had time to reconfigure their computer systems to do those calculations. Until then, jobless workers would just get another $200. But, nothing has been agreed upon yet.
What’s the latest on evictions?
For millions of Americans, things are looking grim. Unemployment is high, and pandemic eviction moratoriums have expired in states across the country. And as many people already know, eviction is something that can haunt a person’s life for years. For instance, getting evicted can make it hard to rent again. And that can lead to spiraling poverty.
Which retailers are requiring that people wear masks when shopping? And how are they enforcing those rules?
Walmart, Target, Lowe’s, CVS, Home Depot, Costco — they all have policies that say shoppers are required to wear a mask. When an employee confronts a customer who refuses, the interaction can spin out of control, so many of these retailers are telling their workers to not enforce these mandates. But, just having them will actually get more people to wear masks.
You can find answers to more questions on unemployment benefits and COVID-19 here.
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