MIAMI – A South Florida community bank is celebrating having helped about 200 small and mid-sized businesses access the federal government’s first-come, first-served basis Paycheck Protection Program loans.
Apollo Bank, a community bank in Miami-Dade County founded in 2001, is among the participating lenders. Eddy Arriola, the president of the bank, said at first he thought large national banks would absorb most of the demand.
That didn’t happen during the second round of emergency funds released because a new law provided $60 billion be divided evenly between financial institutions with less than $10 billion in assets and those with $10 billion to $50 billion.
“The community banks, and the regional banks, and the credit unions have been superstars,” Sen. Marco Rubio said. “They have done 77% of this lending and they move a lot faster.”
The U.S. Treasury is also requiring applicants to certify in good faith that they don’t have additional sources of capital and the loan request is necessary to support the ongoing operations. Those who lie and get audited could face criminal charges.
“Despite all of its challenges and hiccups and people getting it that shouldn’t have gotten it and all that kind of thing, it has been the part of the CARES Act that has worked the best,” Rubio said. “There is still people waiting for their IRS check. There are still people who haven’t been able to apply for unemployment."
Fintech companies like PayPal, Intuit, Square, and OnDeck are also processing the loans.
In the first round of the U.S. Small Business Administration funding, about 1.6 million businesses received the coronavirus pandemic relief loans. Businesses with SBA certification numbers had a better chance. The second round is ongoing.
$310 billion, $60 billion is to replenish the EIDL program and $250 billion for the PPP loans, with $60 billion set aside for community banks and community development financial institutions (CDFIs). The initial round of funding under the CARES Act of $349 billion lasted about a week before it dried up and this round is projected to only last four to six days.
Out of the $60 billion allocated to the SBA’s Economic Injury Disaster Loan Emergency Advance program, $50 billion is for loans and $10 billion is for grants. Arriola said he and his team are working diligently to make sure their clients get the funds they need.
“We know the names of the individuals that run this small and mid-sized business and so when they called us it became a personal mission,” Arriola said.