Wisconsin banks had processed more than 31,000 loan applications by Monday as part of the Small Business Administration’s Paycheck Protection Program (PPP).
The program is designed to help small businesses keep employees on their payroll during the coronavirus pandemic, but Thursday, it hit its $349 billion cap. Now, Wisconsin bankers say they’re hopeful additional funding is on the way.
The Wisconsin Bankers Association issued a statement Thursday urging Congress to provide more money for the program. President Donald Trump requested $250 billion in additional funding, but lawmakers haven’t been able to agree on the details.
Before funds ran dry, Wisconsin banks approved more than $7 billion in small business loans to help companies weather the economic storm caused by the new coronavirus. Only nine states have been awarded more money through the program.
Kathy Rankin, CEO of Tomahawk Community Bank in central Wisconsin, said the bank's five-person commercial loan department worked in shifts, day and night, to process applications.
"The website seems to go very slow during the day and it seems to work faster at night when less people are on it," she said.
Last she checked, Tomahawk Community Bank had approved nearly $4 million in loans for area businesses, Rankin said. If additional funding is made available, that number could increase to $6 million, with the money going to a variety of businesses in the community.
Sign up for daily news!
Stay informed with WPR's email newsletter.
Rankin expects funding for the program to be increased, she said.
"From what we've seen, I think the government is committed to helping the small businesses through this crunch," she said.
Through the program, a company with fewer than 500 employees can apply for a loan in the amount of two-and-a-half times its average monthly payroll. If it keeps its employees for eight weeks after the loan is disbursed, the loan will be forgiven.
PPP is part of the CARES Act, the $2 trillion coronavirus stimulus package signed into law last month.
Though the program has its critics, it has also received many applications. Through Monday, more than a million PPP loans had been approved across the country in the average amount of $239,152 per loan, according to SBA data.
Though construction has been deemed an essential service in many states, the industry has accounted for the largest percentage of approved loans. Restaurants and hotels, which have struggled as a result of social distancing, accounted for just under 10 percent of approved applications.
All Paycheck Protection Program loans are guaranteed by the SBA, but with a 1 percent interest rate, they’re no financial boon for banks. After factoring in operating costs, Tomahawk Community Bank is unlikely to break even on them, Rankin said.