Normally, Fifth Third Bank executes about 300 U.S. Small Business Administration (SBA) loans a year.
But these are not normal times. In the past week or so, the Cincinnati-based bank, the Dayton region’s largest, has received about 33,000 applications for the SBA’s Paycheck Protection Program Loan program, Fifth Third’s chief executive told the Dayton Daily News.
Fifth Third, an SBA preferred lender, has funded a portion of those loans, focusing first on established Fifth Third customers, although any business may apply to Fifth Third for the loan.
The federal loan is designed to be forgiven to small businesses to the extent that those businesses retain their workforce. Companies desperate to stay afloat during the COVID-19 pandemic are flocking to apply.
“It’s an important program for small businesses,” Greg Carmichael, Fifth Third president and CEO, said in an interview. “It’s critical to them. But it was light on details, and those program details didn’t get finalized until last Thursday night.”
The process, to use Carmichael’s adjective, has been “daunting.”
Thousands of businesses nationwide are clamoring for access to the federal funds. But loan program rules have only just been finalized, and the SBA computer system has had trouble handling the deluge of applications, the CEO said.
Often, the SBA computer system is down during critical business hours, slowing the entire nationwide effort.
“The system is going down,” Carmichael said. “It was down from three o’clock to nine o’clock yesterday (Wednesday). The day before, it was down for four hours in the middle of the day.”
The infrastructure simply wasn’t in place to deal with demand.
“High on aspiration, low on details,” is how Carmichael describes it.
He was adamant however, that Fifth Third and other banks would help businesses navigate this period, no matter the current challenges. He expects the application process to get easier in coming days.
“Banks were not in a position to start taking applications the next day, in most cases,” he said. “There’s no lack of effort. Our people our working 7 by 24.”
As of Thursday afternoon, the SBA had approved about 400,000 paycheck protection loans, to the tune of about $100 billion. Congress approved the program late last month as part of the huge $2.2 trillion relief package signed by President Trump.
The program is funded up to $350 billion, and a bid to add $250 billion to the program is stalemated in Congress at the moment. Carmichael is confident additional funds will be approved, however.
He could not say how many applications are being pursued in the Dayton or Cincinnati area.
With most banks, applying is a manual process, involving manually logging on to the SBA system. “You can only imagine, millions of businesses who want access to these funds now.”
“Every bank I’ve talked with is struggling with the same thing here,” Carmichael said.
To speed the process, Fifth Third has established a “digitally assisted” system, which went live Wednesday, he said.
“We have started putting in a higher level of volume,” said Carmichael, a 1985 University of Dayton graduate.
All banks are working around the clock to meet demand. Carmichael said he and other bank leaders understand how desperate business owners are to navigate an era in which on-site dining and gatherings in the hospitality and restaurant industry have been shut down essentially by government edict, creating a wide ripple effect impacting other businesses.
About 17 million Americans are unemployed right now.
“They are very anxious, and rightfully so,” Carmichael said of his business customers. “They are very concerned. They have a big need, and we understand that.”
Businesses should understand that they may apply to the Paycheck Protection Program until the end of June.
Businesses can learn more about the program at sba.gov.
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