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PPP Funding Out But Not Necessarily Over; Lenders Preparing

Mary Ellen Biery
April 18, 2020
Read Time: 0 min

Support strong for PPP funding

Funding for the $349 billion Paycheck Protection Program (PPP) may be depleted, but many financial institutions are continuing to take new applications and process those in their pipelines in anticipation of a new appropriation.

The question seems to be not whether Congress will approve additional funding, but how much and when, given bipartisan support and the unmet demands for loans. While the U.S. Senate isn’t scheduled to meet again until Monday, Democrats and Republicans were reportedly meeting to try to work out a deal.

Karen Mills, the SBA Administrator under President Barack Obama, called on Congress to act as soon as possible to replenish funding with at least $350 billion. Atlanta Federal Reserve Bank President Raphael Bostic said Thursday small businesses may need as much as $500 billion a month to ensure their survival through the coronavirus crisis, suggesting that information could guide discussions on expanding the PPP.

More than 1.6 million businesses received an average loan of $206,000 under the program, with nearly 5,000 lenders participating, the SBA said Friday in a news release. “Nearly 20% of the amount approved was processed by lenders with less than $1 billion in assets, and approximately 60% of the loans were approved by banks with $10 billion of assets or less,” the SBA said. “No lender accounted for more than 5% of the total dollar amount of the program.”

Banks, credit unions prepare for more funding

The SBA said it had processed the equivalent of 14 years’ worth of SBA loans in the 13 days between the April 3 program launch and Thursday when it closed the E-Tran application portal. The SBA said on Thursday that it could begin processing loan applications and issuing loan numbers as soon as Congress appropriates additional funds.

Lenders plan to be ready.

Abrigo customer Western States Bank in Laramie, Wyoming, which has already received SBA approval for 318 loans totaling $26.7 million, told customers on its website that it continues to take applications from eligible customers in Colorado, Nebraska, and Wyoming, even though the PPP funds had run out. “We hold out hope that more money will be allocated soon and we can continue to help those in need who apply,” the website said.

Executive Vice President and Chief Credit Officer Glenda Sorotski said Western States Bank’s customers used an online application for the PPP loans, enabling lenders to process more than they would have been able to if they had relied on paper-based applications and documentation. “The online product was a Godsend with bank lobbies being closed due to COVID-19,” she said.

Other financial institutions’ websites also noted they continue to take applications in anticipation of additional funding. “While we can make no promises about when or if this might come to fruition, we encourage you to continue applying online,” says the website of Main Street Bank in Marlborough, Massachusetts. Camden National Bank in Camden, Maine, told customers on its website, “Unfortunately, the SBA is currently unable to accept new applications for the Paycheck Protection Program based on available appropriations funding. We are, however, continuing to accept materials for future applications in the event that additional funds are added.”

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Financial institutions aim to complete existing applications

Lenders are also planning to finish processing applications they already have on hand once funding is approved. “We were able to provide funding for 95% of those customers that completed the application process and were approved internally,” said Andy Hunter, President of SaviBank in Burlington, Washington, another customer of Abrigo’s Sageworks SBA Lending solution. “We trust we will catch the other 5% when additional funding is provided.”

Legends Bank in Clarksville, Tennessee, was able to process 228 loans for about $34 million, bank President and CEO Thomas Bates said during a webinar Friday hosted by the Independent Community Bankers of America (ICBA). However, the bank has another 120 or so applications it intends to get through the E-Tran system once funding is approved. “We were hitting our stride as the money ran out,” Bates said. “We’re making sure that by the time it gets reallocated, every [application] will be ready to be input into the E-Tran system.”

Other bankers on the ICBA webinar agreed that getting unprocessed applications completed is a top priority. “Our team – they’re very proud of the numbers they did, but they’re more worried about those we couldn’t get through,” said Steve Domine, President of Minnesota Community Banking and Senior Vice President of Lending for Stearns Bank. “It’s something we look at as our duty.” Several bankers on the ICBA webinar noted that independent contractors and self-employed individuals barely had any ability to apply for PPP loans, since they weren’t even eligible to apply until April 10.

Stearns Bank was able to process and obtain SBA approval for more than 2,000 PPP applications before funding ran out, but the $2.5 billion bank has more than 3,000 applications it intends to go back and review in preparation for additional funding. However, Domine said, “We’ve got one eye on the fact that we think that it’s very likely that if there is a new phase, there will be new we’re preparing for that as well.”

How to be ready for new PPP funding

John Ramage, President and CEO of First National Bank of Brundidge, said he expects that whatever money Congress approves will go quickly.

“Two hundred and fifty billion dollars sounds like a lot – and it is, but it’s not going to last long,” he said during the ICBA webinar, referring to a Republican funding proposal that has so far been unsuccessful. “A lot of banks are sitting on a lot of applications right now.”

Financial institutions that want to be ready to help the small businesses in their communities with the second wave of funding can be better prepared to process applications quickly by automating and streamlining the PPP loan process. Some solutions enable lenders to begin automating PPP loans in 48 hours, and solutions that are integrated with E-Tran help lenders address some of the frustrations with E-Tran’s accessibility. A lender using Abrigo’s E-Tran integrated SBA Lending solution, for example, knows that data saved within the solution will automatically be resubmitted when E-Tran resumes operation – whatever time of day or night that is.

Financial institutions are also asking the SBA during the wait for funding to plan ahead for the second wave by clarifying guidance and adding capacity to the E-Tran system.

The National Association of Federally-Insured Credit Unions (NAFCU) in a letter Thursday asked SBA Administrator Jovita Carranza to continue processing applications for lenders that want to be able to offer PPP loans but have never been SBA lenders and to address delays in processing PPP loan approvals. “Certainly, lenders can expect delays to some degree given this unprecedented lending program, but NAFCU encourages the SBA to do anything possible to speed up the processing in the lending portals,” wrote NAFCU President and CEO B. Dan Berger.

About the Author

Mary Ellen Biery

Senior Strategist & Content Manager
Mary Ellen Biery is Senior Strategist & Content Manager at Abrigo, where she works with advisors and other experts to develop whitepapers, original research, and other resources that help financial institutions drive growth and manage risk. A former equities reporter for Dow Jones Newswires whose work has been published in

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