Partnering with Abrigo, CDFI Community Bank of the Bay ‘Ready to Go’ for PPP
Making a Difference in its Communities
The mission of Community Bank of the Bay, California's first depository Community Development Financial Institution (CDFI), is economic empowerment in local communities. That's one reason the Oakland, Calif., institution was eager to participate when Congress passed the Economic Act to Hard-Hit Small Businesses, Nonprofits, and Venues Act, or the Economic Aid Act.
After all, Community Bank of the Bay during the first two rounds of the Paycheck Protection Program (PPP) had already helped local businesses in the San Francisco Bay area secure 390 loans totaling about $81 million. Bank staff and executives had seen for themselves the impact of the funding on local businesses.
“It made the difference between survival and going out of business, unfortunately, for many businesses,” said President and Chief Executive William S. Keller. Helping those businesses also helped the $650 million CDFI gain many new clients that have remained on board.
'Ready to Go' on New PPP Round with Abrigo's Partnership
With the Economic Aid Act's special carve-out of funding for CDFIs, Community Bank of the Bay was prepared and eager to assist again.
“We’re ready,” said Keller, the eve before the PPP funding pipeline opened to CDFIs and other lenders on Jan. 11, 2021. “The application came out Friday and we worked on it all through the weekend along with our partners at Abrigo, and we’re ready to go. We’ve been focused on this for a while.”
Community Bank of the Bay had implemented the SBA Lending Solution by Abrigo, a leading technology provider of compliance, credit risk, lending, and asset/liability management solutions, during the first round of PPP to handle the large volume of interest from local business owners.
'Easy for Clients,' Making the Process Go Faster
"It made it extremely easy for our clients of ours, because all of their information was already in the appropriate system," Keller said. “We just ported it over to the application and submitted it to the SBA.”
Abrigo's SBA Lending Solution has been quickly updated with each round of the PPP to reflect changing regulatory guidance so that lenders can automate the underwriting process and handle borrowers' applications for forgiveness while remaining compliant with federal requirements.
"With this new round of PPP, there are certain requirements that borrowers have to provide to show eligibility for a second draw, and with the Abrigo solution, we have all of that information in our system, which will make that process go much, much faster," Keller said.
Lenders are also able to track reporting to the SBA through the same Abrigo solution. Since the PPP began, community financial institution customers of Abrigo's SBA Lending Solution have processed 137,000 new-loan applications for businesses that borrowed nearly $39 billion.
As the next round of PPP funding begins, Community Bank of the Bay has made a few changes aimed at allowing it to reach even more businesses. "We have shifted significant resources to the application process," Keller said. The institution has also streamlined its processes, assigning some staff to take phone calls, some to handle emails, and others to respond to applicant questions so that processors and others submitting applications to the SBA can focus on those tasks without interruption.
Helping as Many Gain PPP Access as Possible
In addition, while the bank previously required PPP borrowers who weren't already clients to open an account with the bank during the application process, this time, it won't. "Right now, it's about helping as many members of our community as possible get access to this opportunity," Keller said. A significantly larger number of applicants could be funded in the current round than in earlier rounds, due to smaller loan-size limits and the tighter restrictions on who can apply, Keller said. "If we do a good job, we believe we'll win their business."
Abrigo's automated solution will help Community Bank of the Bay capture PPP funds in a fraction of the time as manual processing, and it helps reduce errors by providing tool tips to borrowers as they are filling out the online loan application. Community Bank of the Bay also takes the time to review each application and work with borrowers to make sure applications are correct.
"Getting access to the money is still about accuracy as much as speed," he said.
While larger financial institutions might tout their much larger PPP loan volume compared with an institution the size of Community Bank of the Bay, Keller said his bank's service and communication provided to individual borrowers outshines the banking Goliaths. "Did the larger banks get 100% of their clients who qualified approved? We did. Some of the larger banks left clients out. We didn't."
Abrigo's solution, as well as the service and communication it has provided, has also helped Community Bank of the Bay assist businesses in its communities throughout the Paycheck Protection Program.
"We've had a great relationship with the Abrigo team," Keller said. "We've had ongoing dialogue, so we feel like we're prepared."