The US Small Business Administration opened its Paycheck Protection Program portal for another round of its small business relief loans on Tuesday, Jan. 19.

Some are already looking at SBA approvals for loans through the program, which was started to help businesses survive the Covid-19 epidemic.

Last week the SBA announced it would allow lenders with assets of $1 billion and under to submit first and second draw PPP loans in efforts to continue its emphasis on community lending. Also last week, the SBA opened the PPP to Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), Certified Development Companies (CDCs) and Microloan Intermediaries.

Paducah Bank, which operates locally at 9200 Shelbyville Rd., has current assets of $785 million, and was allowed to access the SBA’s PPP loan portal on Friday, Jan. 15, said Diana Quesada, senior vice president and market executive.

First draw PPP applications refer to borrowers who were unable to access the program during the initial April-to-August run. Second draw PPP applications are available to borrowers who already received a PPP loan, but are returning for another.

The PPP originally opened in April 2020, with more dollars for the program authorized in the summer. At the program’s end on Aug. 8, the SBA approved more than five million loans nationwide, equaling more than $525 billion in small business relief.

Quesada said she and her team at Paducah worked through the weekend to enter as many PPP applications into the SBA’s portal as they could before the program opened again to larger lenders.

“We started to get approvals from the SBA on Sunday,” Quesada said in an interview. “All the ones we have entered, we’re now getting back and seeing approval. It’s interesting, I would say that we’re not getting as many (applications) as we did in the first round, but I would say we got a lot of them that actually did not qualify.”

The SBA made a number of changes to the eligibility of its program this time around, with the most major one being that second draw borrowers must show at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020, Quesada said.

Despite some borrowers being ineligible for this round of funding, Quesada said Paducah continues to see hospitality clients like restaurants and hotels, as well as nonprofits, dentists' offices and hairdressers applying for the loans.

“One of the things also that we were seeing, I am receiving a lot of first time PPP clients, but this is their second draw, their first draw was with another bank and they chose to do their second draw with us,” Quesada said. “They’ve come to us based on recommendations either from their attorney or accountant, it’s not one that we were advertising. They just had challenges with the first round. With a couple of them, it took them so long, they were really worried whether they were going to get that initial funding and they didn’t want to go through that again.”

Quesada said from the PPP’s initial run, pretty much everyone who applied and qualified received a loan and now many of those clients already have their loans forgiven.

She said going forward, working through the rollout of the PPP has stressed to her and her clients the importance of keeping interim financial statements, on a monthly or quarterly basis, as the loans needed such documentation to prove financial hardship due to Covid-19.

“Smaller businesses may not be producing interim financial statements, and obviously we have to show that qualifier, and (clients) were going back having to look through all of their records to create a spreadsheet to show all of their deposits or gross receipts,” Quesada said. “As I’m talking with my clients that seemed to be the challenge, is that they know their business was down, but we had to demonstrate that.”

Locally, Paducah ranks No. 38 on Louisville’s largest banks list with $4.09 million in deposits in the metropolitan statistical area as of June 30. The bank mainly operates in Paducah, Kentucky and made $614.79 million in deposits outside the Louisville market as of June 30.

By Sarah Shadburne 

Read the Louisville Business First Article HERE