Ohio Businesses Get $14.1B from Paycheck Protection Program

YOUNGSTOWN, Ohio – In the 13 days the Paycheck Protection Program was open, nearly 60,000 Ohio businesses were approved for loans totaling $14.1 billion. 

Funding for the nationwide program ran out around 10 a.m. Thursday, said Small Business Administration Great Lakes Region Administrator Rob Scott. A second round of funding for the program is on the table when Congress returns to session next week.

“Ohio fared very well among the Great Lakes and overall across the country. We’ll have data soon that winnows that down regionally,” he said. “This was a very vast undertaking for our agency. We held an all-hands-on-deck approach from the district offices in Columbus and Cleveland and the branch offices in the Cincinnati and Dayton areas.”

In total, the SBA Great Lakes Region approved 59,800 applications totaling $14,108,889,927. That figure, approved in just two weeks, is about what the region has approved over the past 14 years, Scott noted.

Before the launch of the Paycheck Protection Program, the SBA had 3,200 approved lenders, about half of which were considered active, Scott said. By Friday, two weeks after the program’s launch, there were 5,000 lenders in the SBA’s system.

Part of the slowdown in the early days of the program’s launch resulted from the number of financial institutions that were either entirely new to the SBA’s loan application system or didn’t use it frequently. 

“For an institution that’s not familiar with our product, it can be hard to understand. When we’re in this crisis and need to move fast, it’s not cognizant for someone to learn on the job,” Scott said. “We developed a gateway that’s a simplified version that connected into E-Tran. It was like the Turbo Tax for SBA lending.”

New banks also had to be approved for “delegated authority,” which allows for lenders to process, close and service SBA loans without review from the agency.

“This program, under the Cares Act, was opened to any institution that wanted to offer this SBA product. We have to ensure that the institution is a solid one,” he said. “We set up a streamlined process for non-SBA lenders to apply to offer these loans and get delegated authority.” 

The turnaround for a financial institution was two to three days, he added.

For community banks, added SBA Cleveland District director Gil Goldberg, the program “ended up working well.

“The community banks really participated in an outsized basis. Some of them who were doing maybe two or three [SBA loan applications per year], were doing 100 or 200 loans for their community,” he said. 

The median for loans approved to community banks was $56,000.

Businesses that did not get funding before money ran out shouldn’t have to reapply, Scott said. The SBA portal essentially works like on-off switch, he said. Once it’s turned off, no more applications will be accepted, meaning there are none sitting in a queue.

“From our standpoint, anyone whose lender got an application in has filtered through our system and they’ll get their PPP loans from their lender,” he said. “Those lenders could have applications pending that didn’t get entered into the system. … On our end, there’s no need to reapply. It’s the lenders putting applications into our system.”

With the initial $349 billion exhausted, Congress is expected to take the addition of a second round of funding – reports have put the number at $249 billion – for the Paycheck Protection Program when it returns next week.

If the money is appropriated, the application process should go smoother. Each day since the program launched April 3, the SBA and Treasury Department issued guidance to address questions lenders and businesses had, Scott said. When the next round opens, he said to expect more guidance as that system continues as well.

“The bill was passed and we stood it up in a week. Normally, for our agency or any other, that’s usually six months to a year to implement,” he said. “Was it a perfect rollout? No. Were there hiccups the first couple days? Absolutely. That process has smoothed over. … We were building the plane as we were flying it. We did everything we could to bring clarity to lenders for their customers.”

Copyright 2022 The Business Journal, Youngstown, Ohio.