Ask Your Local Bank Mark Horn, Pinnacle Bank

Ask your Local Bank

By Mark Horn, Market President

In early April, a new lending program was initiated by the US Treasury and Small Business Administration. The program was named the Payment Protection Program. The Payment Protection Program, or PPP as it was widely referred to was designed to provide employers the ability to continue to pay their employees while business was slowed due to the Covid-19 pandemic and associated shutdowns. While using the money for the designated expenses during the allotted time a business would be able to submit those expenses for forgiveness resulting with little to no liability in the form of a loan after completed.

Initially 350 billion dollars were made available and the applications were submitted immediately. The available funds were designed to assist with payroll, rent, mortgage interest and utilities. Applications were submitted to banks in large numbers and at a rapid pace while both bankers and business owners were learning of the rules that governed the program. The short time frame that the government agencies presented this program was unprecedented and highlighted the urgency in which they were wanting banks to assist businesses. PPP was discussed at length in the media and the concern was that the allocated money would run out before all affected businesses would be able to apply. This was a concern shared by many banks accepting applications as well and as a result bankers worked extended hours at times seven days a week to insure that as many of the businesses in need were being serviced.

A result of the need by many businesses and the funds being utilized quickly was a second round being made available late in April. There are still available funds from the second round and the program will end on June 30th. The guidelines for use of the funds have been modified recently and now many businesses are looking at the forgiveness application with the same amount of questions that were present during application. Your banker is the best resource for your questions regarding the program, process, or changes. The program’s success will not be measured based on dollars extended or number of applications but by the number of the businesses whose operations continue and employees who are able to keep working. For more information visit www.sba.gov

Pinnacle Bank 107 E. Aztec Ave Gallup, NM 87301