Letter: More clarity (and funding) needed for PPP

The COVID-19 pandemic has ravaged the global economy and its impact on Corridor businesses and families has been significant.

As a bank to our communities and a lending participant in the SBA’s PPP (Paycheck Protection Program) we have been able to see this from up close. We were approached by hundreds of applicants wanting to borrow through the PPP and by working long hours BankIowa was able to help most, though not all. We assisted as many as we could and wished we could have helped more. We had five applications in the process of being input to the system when the funds were depleted, which made it impossible to submit those.

One problem was the technical challenges in the application process. Due to high demand, the SBA’s application portal was difficult to access and unstable, and the ability of lenders to put applications through was therefore limited.

Another problem was the constantly changing guidance from the SBA on the rules for application. The SBA was clear on its intent to help small businesses and to focus on payroll expenditures, but it was less clear on the details of the underwriting process such as required documentation. This created a risk for lenders by heightening concerns about their own liquidity, and therefore likely resulted in lenders’ delayed ability to assure borrowers in this time of need.

Any further aid must recognize the need for greater clarity in the lending process if our ability to lend is to be more fluid. We commend the Fed’s steps to back PPP loans through the PPPLF (Paycheck Protection Program Liquidity Fund). This was a move that went a long way in resolving concerns about banks’ ability to remain liquid while funding this volume of loans.

The biggest oversight in this program is yet to be resolved. As a result of the far-reaching impact of the COVID-19 pandemic the need in our communities is significant and larger than the $349 billion initially allocated for assistance. Since those funds were depleted April 16, no more PPP loans can be made. More help is necessary.

These are unprecedented times and we require unprecedented solutions. Politics must take a back seat so that essential service providers, including those in our industry, are able to lend the helping hand that is so needed at this time. Congressional representatives should support appropriating additional funds to the Paycheck Protection Program.

Alison Urbina
President & CEO