Protecting St. Mary paychecks: Local banks figure out SBA program

Local banks are among those nationwide that are lending money through the U.S. Small Business Administration’s Paycheck Protection Program, which received congressional approval and President Donald Trump’s signature last week for a second round of funding.
M C Bank and Patterson State Bank are among those who are lending money through the program.
Patterson State Bank CEO and Board Chairman Bill Marin said he has heard that banks can start submitting applications for funding Monday.
The program was developed to help businesses pay their employees for an eight-week period. The loans are “100% forgivable” as long as 75% of the money given is used for employee salaries, according to M C Bank President Jeremy Callais.
“The bank will be paid off by the Small Business Administration as opposed to being paid off by the customer” as long as the requirements are met, Callais said.
The U.S. Small Business Administration guaranteed $350 billion in funding for the first round, and the second round is about $320 billion, Callais said.
The funding is available for those COVID-19-affected businesses with fewer than 500 employees.
Those who own franchises of corporations also can apply for their individual businesses.
The loan is calculated using 2.5 times employees’ monthly income in 2019 with a cap for each employee at $100,000. This can include health and retirement benefits.
The eight-week funding period begins at the time the money is received.
Marin said it was “a bit of a rocky start” for many banks in the beginning to work out problems getting on the SBA’s electronic system where submissions are sent.
“There were a lot of frustrated banks around the country that actually some of them I don’t think ever did get on that first round of money,” Marin said. “We were able to get on and ended up getting submissions done, getting SBA loan numbers, which in effect gave us the SBA guarantee.”
The program will run until the money dries up, with the cutoff being June 30.
Callais and Marin expect the new round of funding to go quickly, and Callais said he is unsure if it will be refunded.
“When the first one ran out, our senators and congressmen made it very well known ‘don’t worry, there’s going to be more money coming available,’” Callais said. “However, this time, you don’t hear that same chatter. I’m not saying there won’t be. I’m saying we were basically told ‘hey, look, when it runs out, don’t worry. We’re going to go get more.’ We’re not hearing that like we did the first time, and I guess it’s because things are starting to project to open back up.”
Marin said those who need to apply for funding should do so as soon as possible.
According to the Louisiana Bankers Association, Louisiana agencies had 26,635 loans totaling $5.1 billion approved for customers in the first round of funding.
Marin credited his employees for the work they have done during this process.
“While I guess overall it was a trying experience to start with, I can’t say enough about our team of workers,” he said. “Our tech people that got on this and figured out how to get through the etran system, and then after that was done, we had bankers that worked day and night staying at it and submitting and then funding the loans.”
The amount of money the SBA has lent during the COVID-19 pandemic is “unprecedented,” according to Marin, who has been in the banking industry since the early 1970s.
“The SBA has had its programs, but it’s been minor compared to this,” he said. “They’ve put out their numbers about what they typically do in an annual basis, and this dwarfs it, and I’m talking about only being two weeks old, it dwarfed what they generally do for years in that program.”