By Mitchell Kirk | Daily Reporter
GREENFIELD — Businesses are flooding banks with interest in a loan program for enduring the COVID-19 crisis, requiring at least one Greenfield-based lender to work around the clock to handle it all.
The second round of the U.S. Small Business Administration’s Paycheck Protection Program has been under way for more than two weeks. Backed by a total of $659 billion, it was created as an incentive for small businesses to keep workers on the payroll amid the coronavirus’s impairment to the economy.
Loans are forgiven if companies spend 75% on payroll within eight weeks of receiving the money. The other 25% can be spent on rent, utilities and mortgage payments. Otherwise, the loan has a 1% interest rate and six months before any principal is due.
The Small Business Administration lists a variety of criteria for eligibility, with 500 employees as the most common standard.
Renee Rupley, vice president-marketing director for Greenfield Banking Company, called the bank’s clients’ participation in the program “overwhelming.” As of May 1, the bank had processed more than 300 loans for a total of about $35 million, Rupley said, adding there were no signs of slowing down.
“We just keep going as fast as we can to process them,” she said. “We have people working around the clock. We had a shift that comes in at 3 a.m. I’m talking 24/7.”
Rupley said the bank worked quickly to create an internal system for processing the loan applications in a matter of days, something that outside of an emergency likely would have taken months to develop.
“Through these loans so many people have been able to keep their jobs that wouldn’t have otherwise,” she said.
Stephanie White-Longworth, chairwoman, partner and president of Greenfield-based Pride Investment Partners, LLC, told the Daily Reporter in an email that the firm applied for a Paycheck Protection Program loan through Greenfield Banking Company for its Leo’s Market and Eatery and Evolution VR, which offers virtual reality gaming. Both loans were approved for 2½ times monthly payroll costs, White-Longworth said, adding Evolution VR primarily has one full-time and three part-time employees while Leo’s employs closer to 20 full-time workers.
White-Longworth said the application process was completed online and that most of the requested data was easy to get.
“Waiting for the funds and knowing when we should start calling back our staff required a little patience,” she added.
The government has not provided clear guidance on how the forgiveness part of the program works, White-Longworth added, but Greenfield Banking Company “has done a great job providing daily updates as they receive information.”
At Evolution VR, the funds are being used to continue paying staff as they work from home while the business is closed, White-Longworth said.
“They are busy learning new games and staying fresh on our systems for a hopeful reopening in the near future,” she added.
The funds for Leo’s are also being used to help cover payroll costs, ,ywqshe continued. The store had to let go about half of its workforce due to the economic challenges created by the pandemic.
“Since that time we have been working to bring back as many of our staff as possible,” White-Longworth said.
Many of them don’t want to return, she said, due to making more money though unemployment and stimulus payments, a fear of contracting the virus or a combination of the two.
“We are currently still looking for additional team members to get back to full capacity before things fully reopen,” she said, adding employees are receiving hazard pay of $3 per hour when working in the store. “The funds will also be used to help cover these increased costs.”
While sales have declined at Leo’s fuel pumps outside the store, inside sales have held up pretty well, White-Longworth said.
“We have kept a major focus on being a safe place for our customers to purchase groceries and other necessities without having to visit the bigger stores,” she said.
Customers can also use the store’s drive-thru to buy anything inside except for lottery tickets and alcohol. The store has added a delivery service within a three-mile radius as well.
Fort Wayne-based Star Financial Group, Inc. has 20 locations in central and northeast Indiana, including one in Greenfield. Matt Singleton, small-business banking sales manager for Star, told the Daily Reporter in an email that the institution has processed more than 1,600 Paycheck Protection Program loans for a total of about $260 million throughout its footprint as of May 1.
Pittsburgh-based PNC Financial Services Group, Inc., which has banks in Greenfield and McCordsville, said in a news release on May 1 that the U.S. Small Business Administration had registered more than 70,500 Paycheck Protection Program loans totaling $14 billion for PNC small business customers.
The federal government’s $2 trillion COVID-19 relief package included $349 billion at first for the Paycheck Protection Program, which was besieged with applications and ran out of money on April 16.
Congress and the White House then reached a deal that would provide another $310 billion and the program resumed on April 27.
The program drew controversy when wealthier businesses like the Los Angeles Lakers, Shake Shack and AutoNation were awarded loans. Those three companies later returned the funds.
