A new Small Business Administration program launched Friday to lend $350 billion to businesses around the nation to help them meet payroll expenses amid coronavirus-related shutdowns may take time to ramp up, according to Phyllis Gurgevich, president and CEO of the Nevada Bankers Association.
“Be patient,” Gurgevich said in an interview, adding that banks are doing their best to help as many customers as possible in the shortest amount of time.
She said banks are, at times, having trouble getting their loans into the SBA system for approval.
“The challenges vary by bank,” she said.
Other banks are taking longer to review the SBA’s initial guidance released Friday officially launching the Paycheck Protection Program (PPP), which was signed into law last week.
The public has 30 days from today to comment on the rules governing the program, advocate for changes or point out any unintended consequences.
“Sheer volume won’t be the only reason the program will take time to implement,” Gurgevich continued said in a release. “Financial institutions still need guidance from federal agencies and regulators to move forward with PPP loans.”
Lenders who already participate in the SBA 7(a) loan program, the agency’s general small business loans program, are approved to provide loans under the PPP. About 1,800 banks participate in the SBA 7(a) program. Other lenders will also participate in the program once getting approved by the SBA.
In Nevada, there are more than 60 banks that have experience with the 7(a) program, according to SBA loan activity between October 2017 through June 2018.
During that time frame, the Bank of Nevada had the largest portfolio of SBA 7(a) loans totaling more than $16 million over 35 loans. Meadows Bank had 12 loans worth more than $12 million, and Wells Fargo was third with 63 loans totaling just over $12 million. U.S. Bank had the highest number of loans, 67 totaling more than $6 million.
PPP is the second SBA program being used to aid in recovery from the coronavirus crisis. Last month the White House made available up to $50 billion under its economic injury disaster loan program.
The new law also provides enhanced unemployment benefits that include providing an additional $600 per week in benefits for up to four months and extending benefits for 13 weeks beyond the 26 weeks offered in Nevada. Guidance from the Department of Labor is expected soon.
Disclosure: The Nevada Independent has applied for a loan from the Small Business Administration.