“It was very helpful. The reports I’m getting from bankers around the country is that a lot were able to finish up, or closely finish up, all their PPP loans that were backlogged,” ICBA Group Executive Vice President of Congressional Relations Paul Merski told Dodd Frank Update. “They had their staffs working through the evening and getting a lot of loans processed during that time. So we very much appreciate that Treasury and SBA allowed that window for community banks to get their loans through, and it seems to be really working well in helping banks with their backlogs of loans.”
The move by SBA drew immediate criticism from larger lenders, who questioned why the first come, first served model had been changed. But Merski said the work of small lenders Wednesday night during the eight-hour window was positive.
“Community banks have largely been manually submitting loans, and they don’t have armies of loans offices, so that gave them a nice window to get PPP loans processed. I’m hearing very positive reports about the window,” he said.
“Starting about Tuesday afternoon the system seemed to be a bit more responsive. SBA made some tweaks on the robotic submissions that they discovered were slowing down the system, so they seemed to be able to make some adjustments to get things moving as the week went on.”
Anecdotes from lenders large and small found that the system speed did appear to pick up after the window for small lenders to file applications closed at midnight.
The work highlighted stories from around the lending industry the first few days of PPP restart, which found loan officers and staff working tirelessly late into the night, sometimes refreshing systems for hours as they continually got kicked off, to get applications to SBA.
“I have a saying that you compete by competing, you don’t compete by complaining,” Merski said. “Community banks around the country had the grit where they’d just keep at it, one loan at a time, for their small business customers. Not having full guidance, not having the armies of loan officers, they really proved themselves with doing a great job as the delivery mechanism for getting these loans out to small businesses.”
“The average loan size is under $100,000 now, so funds are getting to smaller businesses. I think that’s absolutely a broad indicator that funding is better reaching mom-and-pop businesses, the small businesses who were really delayed in the first round.”
To see more great stories like this, subscribe to Dodd Frank Update!