As COVID-19 hit, and small businesses up and down Broadway and Main Street in Everett and beyond began to panic, the banking community began to start trying to figure out how they could help.
The answer quickly came with the Paycheck Protection Program (PPP), and while some banks passed on the program and saw it as too cumbersome and risky, a number of banks like Everett Bank dug in and started navigating the minefield.
“Several smaller banks didn’t get involved,” said Richard O’Neil, CEO of Everett Bank. “We saw it as an opportunity to help some of our business customers. The first Monday of the program the phone rang off the hook with business after business. There were no applications yet, but people were expecting it. We are a Small Business Administration (SBA) lender so we had a head start on it. We knew the basic info…We were able to get about $12 million and 125 applications. When you divide it up, it doesn’t sound like a lot of money, but it is a lot of money to these small businesses in the community.”
Though the program is still operating through Aug. 8, the rush has slowed dramatically and the second part of the program is now beginning to operate – that being who is forgiven for the loans and how banks will be repair, as they lent their own money with the promise by the SBA to reimburse them. At the moment, too, many are evaluating the program locally, like in Everett.
Nationally, 70 percent of the loans were $100,000 or under. Only 2 percent were over $5 million, though that was 35 percent of the total dollars available. Some 84 percent of the loans were under $350,000. It is estimated nationally that 51 million jobs were supported by the program.
Most of the loans came from small banks nationally as well, according to Mass Bankers Association. Banks with more than $50 billion in assets made 34 percent of the loans, while banks with less than $10 billion in assets – mostly community banks – made 51 percent of the loans.
In Massachusetts, according to the Mass Bankers Association, the average loan size was $129,000 and there were 111,000 loans made for a total of $14.3 billion.
Recently, the SBA released city and town specific data for those receiving PPP loans under $150,000. In Everett, there were 401 PPP loans approved for amounts under $150,000. The data showed most were between $80,000 and $135,000 in Everett. However, there were loans as small as $700. Any number of lenders were used for the PPP loans, and O’Neil said he’s confident most all of the money from the program got into the right hands.
“We all heard the stories of the Lakers or the big corporations getting PPP loans,” he said. “We didn’t have that experience. It was all legitimate small businesses that needed help. And they used it to just keep going in the pandemic. We don’t yet know how this all plays out for sure, but we helped a lot of people.”
Daniel Forte, president of Mass Bankers, said the program was rushed and had its hiccups, but in the end, the result was what it was intended to do.
“Because it was rushed politically and I say that kindly because we were in extreme economic conditions at the time, that didn’t let us have time,” he said. “Given the lumpiness of the rollout and the constant changing of the rules, you still have to say this was a home run. Kudos to the banking industry for putting in the hours to make it work. They worked many hours. A number of the banks also saw this as an opportunity to show how they could serve small business customers.”
It was exactly the case at Everett Bank.
O’Neil and COO John Citrano said they had a team that would work from 11 p.m. to 4 a.m. – many of them working from home – to try to get into the online queue in off-hours.
“I remember sitting in Richard’s office, and despite knowing it was going to be administratively challenging to roll this out given the restrictions we had and the COVID-19, but under Rich’s directions we knew we needed to make it work,” he said.
With Joe Keohane and Jennifer Quinlan – along with CPA Joe Sachetta (also chairman of the board) – they put together a team to hit the ground running on the program.
“It was a brilliant idea wherever it came from to utilize the community banking system to get that money to where it was needed,” said O’Neil.
Both he and Citrano said they ended up gaining several good clients as well, people who came to them for help as their existing bank wasn’t doing PPP loans.
Forte said it’s important to stress that the PPP program is still continuing through Aug. 8, and companies that need the help should look to take advantage of it. He said there is still $100 million left in the program.
“There’s still money available,” he said. “Granted, some banks are no longer participating because they made so many loans. That was all bank money. The government has to reimburse them. So, some folks have hit the pause button. Others are still participating. We encourage businesses, particularly women-owned or minority-owned small businesses that were maybe excluded from the first round because they didn’t have strong banking relationships, to go to banks open to the program because there are funds available.”
At this point, there is also a pivoting period where the federal government is analyzing those who took loans in the early days about whether they qualify for forgiveness. Many will have the slate wiped clean if they qualify, while others will have to repay the loan, but over two years at only 1 percent. That is the new process, and the new rush that has now enveloped the program as the funding process winds down.
“Now we’re back in the same mode with the SBA trying to figure out who will qualify for complete forgiveness and what those requirements will be,” said O’Neil.