The banks in Wisconsin had processed more than 31,000 loan applications under the Small Business Administration’s Paycheck Protection Program (PPP) by Monday.
The program is designed to help small businesses keep their employees on their payroll during the coronavirus pandemic, but Thursday it is reached the ceiling of $ 349 billion. Now Wisconsin bankers say they hope additional funding is on the way.
The Wisconsin Bankers Association made a statement Thursday called on Congress to allocate more money to the program. President Donald Trump called for $ 250 billion in additional funding, but lawmakers couldn’t agree on the details.
Before funds dried up, Wisconsin banks approved more than $ 7 billion in small business loans to help businesses weather the economic storm caused by the new coronavirus. Only nine states more funds were awarded through the program.
Kathy Rankin, CEO of Tomahawk Community Bank in central Wisconsin, said the bank’s five-person commercial lending division worked day and night to process applications.
“The website seems to be very slow during the day and seems to work faster at night when fewer people are accessing it,” she said.
When she last checked, the Tomahawk Community Bank had approved nearly $ 4 million in loans to businesses in the area, Rankin said. If additional funding is made available, that number could climb to $ 6 million, with the money going to a variety of companies in the community.
Rankin expects funding for the program to increase, she said.
“From what we’ve seen, I think the government is committed to helping small businesses through this crisis,” she said.
The program allows a company with fewer than 500 employees to apply for a loan equal to two and a half times its average monthly payroll. If she keeps her staff for eight weeks after the loan is paid off, the loan will be waived.
PPP is part of the CARES law, the $ 2 trillion coronavirus stimulus package that went into effect last month.
Although the program has its critics, it has also received many applications. As of Monday, more than one million PPP loans had been approved nationwide, averaging $ 239,152 per loan, according to the SBA.
Although construction is viewed as a vital service in many states, the industry has the largest share of approved loans. Just under 10 percent of the approved requests went to restaurants and hotels struggling due to social distancing.
All Paycheck Protection Program loans are guaranteed by the SBA, but with a 1 percent interest rate, they are not a financial boon to banks. After considering operating costs, Tomahawk Community Bank is unlikely to have made up for it, Rankin said.