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With Congress securing additional funds for the Paycheck Protection Program, small businesses can rest assured that more help is on the way.
Within two weeks, the PPP’s initial funds were depleted, as hundreds of thousands of small businesses applied for low-interest loans. In a matter of days, America’s business community asked for more than $339 billion in financial relief.
We cannot overstate just how unprecedented these turbulent times are — for small businesses and the banks trying to keep them afloat (and trying to stay afloat themselves). The initial PPP application spree saw more than 4,900 financial institutions step up for small business, coordinating with the Small Business Administration to figure out the benefits contained within the $2 trillion stimulus package and how they could be distributed to those in need.
As care providers fight to keep us healthy on the medical frontline, financial institutions are joining them on the economic frontline. This is especially true for community banks, which comprise 99 percent of U.S. bank charters. According to the Independent Community Bankers of America, the community banking sector has 52,000 locations and 760,000 Americans on staff, providing more than 60 percent of all small business loans and more than 80 percent of all agricultural loans. (Full disclosure: My bank is both an American Bankers Association and ICBA member.)
These days, when small businesses apply for a low-interest loan, they are most likely asking a community bank. Because we are embedded in local communities, we consider small business owners nearby to be friends and neighbors. We know them on a personal level, and they trust us to provide the services that friends and neighbors deserve.
That is more true now than ever before. Demand for our services from trusted people has never been higher. There has never been more at stake.
At Kennebec Savings Bank, we have transitioned nearly one-third of our employees to work on COVID-19 relief full-time. In truth, 100 percent of our employees hope to chip in for small businesses, and many are clocking 12- and 16-hour days to do just that.
Before PPP funds ran out, nearly 15,000 loans were approved in Maine, totaling about $2 billion in financial relief. In terms of loan volume as a portion of eligible payrolls, the Pine Tree State ranks sixth in the entire country.
It’s no surprise to us: In 12 days, we fulfilled more than half of our annual loan volume. We closed and funded more than 400 loans for $52 million, helping save nearly 6,000 jobs in our area. For one local business, we processed and funded a $2 million loan in 3.5 hours. This is a sprint, not a marathon!
COVID-19 has also changed the way we work. Before the pandemic, remote work accounted for only 2 percent of workflow at Kennebec Savings Bank. Within nine days, that figure shot up to 82 percent. Community banks like ours are figuring out which traditional work processes are in fact “essential” versus “non-essential.” Even after the pandemic has run its course, remote work will surely be more widespread in our industry and throughout the broader economy.
But, most importantly, the coronavirus has reminded us all that community really does matter. Even as social distancing keeps us apart, Americans have rarely been so united — fighting against a common, invisible enemy. After 26 years working at Kennebec Savings Bank, I can honestly say that, although we are working apart, our team has never been closer!
Now is the time for community banks and small business owners to come together. Now is the time for family members, friends, and neighbors to unite as we defeat this unique foe.
Together, we can overcome an unprecedented crisis and come out stronger on the other side. Community banks will be there every step of the way, providing financial relief that can save local businesses and keep state economies afloat.
As the PPP’s funds are replenished, you can trust community banks to help. That’s what we’ve been doing all along.
Andrew Silsby is president and CEO of Kennebec Savings Bank.