Paycheck Protection Program Guidance

Guidance from Security National Bank President/CEO – and Chamber Board member – John Brown on the Paycheck Protection Program:

  • EIDL is a loan program directly with the SBA, banks are not involved.
  • PPP is a $350B loan program administered through banks.
  • The program was held up in a matter of days, so not surprised that there were bumps in the road. SBA was delivering rules and guidance, sometimes conflicting, daily, even after the program was supposedly open for applications.
  • Banks have helped an unprecedented number of customers obtain approval from the SBA. At Security, we have approved a year’s worth of loan activity in a matter of a week. We have been working around the clock but incorporating a level of validation. While ultimate responsibility lies with the employer/borrower, the last thing we would want to see is a customer in a position to have a portion of their loan not be forgiven if it is expected.
  • Guidance for closing loans was not final until Monday of this week.  Again, some level of due diligence and compliance with SBA guidelines is preferred in order to protect the banks, but more importantly the customers, especially as it pertains to loan forgiveness.
  • Banks are focusing on two things right now, 1.) Making sure all resources are thrown at obtaining approval for all their customers’ applications that have been received before the money runs out, and 2.) Designing a closing process that ensures SBA compliance AND provides for the health and safety of our customers and colleagues during this pandemic. At Security, we are hopeful to have a totally electronic closing process.

  • Some banks have been able to get some funds out sooner than others, at some risk. However, I would expect the majority of banks to begin closing loans next week. But again, there is possibly a year or more worth of volume in the pipeline.  So, it is not reasonable to expect that all loans will be closed in a day or two.