Community banks in Northwest Connecticut have handled well over $100 million in federal Paycheck Protection Program (PPP) loans since the beginning of April.
Steve Cornell, president and CEO of National Iron Bank, said in a phone interview Friday, May 1, that the bank has handled about 200 applications for a total of about $20 million.
Rick Cantele, president and CEO of Salisbury Bank and Trust, reported 756 loans for a total of $96.5 million.
Christine Bascetta, Litchfield Bancorp’s chief lending officer, said that of about 200 requests, 175 were eligible, to the tune of about $15 million.
And Lesa Vanotti (president and COO) and Paul Larsen (chief lending officer) of Torrington Savings Bank said their bank has processed more than 200 loans with a total of about $15 million.
The loans are forgivable provided the recipient uses 75% of the money for payroll and 25% for overhead (rent, utilities). If the recipient fails to meet those requirements, the loan becomes a two-year loan at 1% interest.
All the bankers said the initial stages of the program, run through the federal Small Business Administration (SBA), were confusing for everyone involved.
“The first round was crazy,” said Cornell, referring to the initial funding authorized by Congress. (A second round of funding was subsequently approved.)
“Especially since we were learning on the fly.”
Cantele said what guidance was available from SBA didn’t arrive until 10 p.m. the night before the program started.
“We had to kind of wing it,” he said.
Cantele said Salisbury Bank received over 500 requests in the first five hours.
Larsen said the initial and subsequent guidance from the SBA meant bank employees trying to help applicants were aiming at “a moving target.”
Vanotti added that employees weren’t working traditional bankers hours either. If the SBA system was inaccessible during the day, employees tried in the evening.
“And we’re all working remotely,” she added. “That added another level of complexity.”
Larsen said processing each application required between one and five hours of work on the part of the bank, depending on the technology involved in communications between applicant, bank and the SBA, and the “level of sophistication of the borrowers.”
Cantele said his teams of employees focused on the bottom line: getting the funds out to the businesses struggling during the COVID-19 pandemic shut-down.
All the bankers said processing the requests was an “all hands on deck” situation. Bascetta praised Litchfield Bancorp’s employees, both in retail and commercial lending.
“Our staff is adaptable and nimble.”
And she spotted the silver lining. Asked if the bank now has a staff that knows more about commercial lending than they ever expected to, she laughed and said “It’s a great cross-training opportunity. Kind of a blessing in disguise.”
And the process doesn’t end there. Cornell said the banks are responsible for following up on whether the funds were used properly. This process will stretch out over months.
Vanotti said Torrington Savings Bank’s employees, both in commercial lending and retail operations, are proud of the work they’ve done.
And for the appreciation expressed by the small businesses involved.
“You don’t hear a lot of clapping for the banks,” she said. “But the gratitude is overwhelming from the small businesses.”
Editor’s Note: The Lakeville Journal Company was able to get a PPP loan through Salisbury Bank and Trust in the second round of funding — see editorial this issue for more on this.
