October 7, 2020 Working to save small businesses

Community banks have great success at getting small businesses enrolled in the Paycheck Protection Program

By Brett Auten

During the recent economic downturn, small businesses dotted throughout St. Charles County were struggling to hold things together.

Due to lifestyle changes and government restrictions during – and continuing – through the COVID-19 pandemic, the future of some small businesses are like a goldfish gasping for air.

Some comfort came earlier this year in the

form of the Paycheck Protection Program (PPP) that provided small businesses with funds to pay up to 24 weeks of payroll costs including benefits. Those funds could also be used to pay interest on mortgages, rent and utilities.

In the program’s first weeks, the country’s larger banks were criticized for slow processing and accused of favoritism toward their larger customers. But smaller banks continued to put in overtime.

A community bank with 85 years’ worth of

heritage on its dossier, Peoples Savings Bank is one such approved lender for the Paycheck Protection Program.

“A lot of people knew about the loans so it was all-hands-on-deck for us,” Jordan Lampkin, assistant vice president and loan officer at Peoples Savings Bank, said. “It was a very fast-paced, volatile experience. Everyone was extremely anxious during that first round.”

And, according to a spring report from the

New York Federal Reserve, in states where community banks had a larger market share than larger banks, small businesses received more overall PPP funding. The smaller banks were simply more responsive to clients’ needs.

“Our numbers are small business, with an average of 10 employees,” Lampkin said. “We really went after helping the mom and pop stores.”

“It is always important to have a relationship with your banker,” Michelle Ruediger, a People’s Credit Analyst, said. “You never know when a community bank can help you through tough times or get you the answers you need.” Last week, the Small Business Administration announced that it will begin forgiving loans granted to small-business owners under the Paycheck Protection Program.

The government expects to approve and pay forgiveness requests by late this week or early next, a Treasury spokesperson said. The applications are generally expected to be approved quickly, with the exception of loans above $2 million that will get added scrutiny.

Since it launched an online portal for loan forgiveness in early August, the Small Business Administration has received more than 96,000 applications from businesses seeking to have their loans forgiven – but none had yet been approved.

Peoples Savings Bank was established in 1935 in Rhineland and has locations in Hermann, Rhineland, New Florence, Montgomery City, New Haven, New Melle, and WingHaven.

Nationally, while there has been brighter skies as some small businesses have bounced back, others are sweating it out. According to a late August survey by the National Federation of Independent Business, one in five small businesses said they would have to close shop if conditions don’t improve in six months. And 84 percent of PPP borrowers it surveyed said they have now used the entirety of loans they received earlier, and 44-percent said they would apply or reapply for a second PPP loan if one becomes available. According to Yelp Inc., as of Aug. 31, 163,735 U.S. businesses on its review website have closed since March 1, a 23 percent increase from July 10. Some 60 percent of those businesses have closed permanently.