In four short days, Montana banks and federal officials have processed thousands of federally financed loans to help small businesses in the state weather the coronavirus economic storm, banking and business officials told MTN News this week.
But the demand may already be exceeding the supply, as the depths of the pandemic’s economic impact is deep, they say.
“I think this is one of those areas where we might have to take additional steps, depending on how long the funding goes,” says Todd O’Hair, president of the Montana Chamber of Commerce. “We’ve seen the entire U.S. economy come to a grinding halt, in a way that is unprecedented.”
The loans, which may be converted to grants in some circumstances, are for businesses with less than 500 employees and that have been hit hard by the pandemic-related shutdowns. The money is intended for businesses that are maintaining their workforce during the economic slowdown.
Congress appropriated $350 billion for the loans, as part of a $2.2 trillion stimulus package approved 10 days ago – but as of Tuesday, the amount of loan requests nationwide is already hitting $800 billion.
In Montana, banks and the U.S. Small Business Administration began processing the first loans shortly after midnight on Friday.
Cary Hegreberg, head of the Montana Bankers Association, says 1,000 loans were processed that first day, and that bankers and SBA officials across the state worked through the weekend to keep the loans coming.
An exact count isn’t yet available, but Hegreberg is estimating that several thousand loans have been approved so far.
Banks are handling the traffic and working first with existing customers who already have commercial loans with the bank, he says.
“We know that some small businesses are still anxious,” Hegreberg says. “They’re still not sure how the program works and may have been working with their banker and not getting what they expected. But not everybody can be at the front of the line.”
Yet while the loans are being processed, the actual money may not be in the hands of business owners for a couple of weeks, awaiting the approval of final paperwork, said O’Hair.
“We’re in the early days of this sort of a process, so I think we need to remain patient,” he said. “There are a lot of businesses that are affected.”
Banks in other states are reporting problems with the program, including snags in the SBA’s electronic processes. Some banks also have placed caps on how many loans they’ll approve.
But Hegreberg says SBA officials in Montana have been working closely with businesses and banks to ensure that the process works as well as possible.
He and O’Hair also say Congress and the Trump administration already are considering whether to pump more money into the small-business loan program.
“We’ve been assured by folks at the high level that the Trump administration wants this program to work, to get the money into the hands of small businesses, so they can bring their employees back to work, meet their rent and mortgage obligations, so that when this crisis is over, those businesses can hit the ground running,” Hegreberg says.