Unprecedented times call for unprecedented measures.
To help small businesses negatively impacted by the COVID-19 pandemic, the U.S. Small Business Administration launched the Paycheck Protection Program (PPP), a $349 billion capital distribution program. Following the launch on April 3, the administration processed more than 14 years’ worth of forgivable loans in fewer than 14 days.
The money is meant to seep into every nook and cranny of the United States economy, and Franklin County institutions have helped area businesses get their slice of the federal relief pie.
Mike Tucker, president and CEO of Greenfield Cooperative Bank, said Wednesday afternoon that his employees have processed 186 PPP loans to small- and medium-sized businesses in Franklin and Hampshire counties, committing $17 million. He said $13 million of this sum was already in business owners’ hands.
“My staff has been working nights and weekends to get this stuff done,” he said.
PPP loans are for two years, with a 1 percent fixed interest rate.
According to the U.S. Department of the Treasury, the loan amounts will be forgiven as long as the loan proceeds are used to cover payroll costs, and most mortgage interest, rent and utility costs over the eight-week period after the loan is made; and employee and compensation levels are maintained.
Loan payments will be deferred for six months, according to the Treasury Department. No collateral is required for a loan. PPP is now in its second round of funding, the first lasting from April 3 to April 16.
John Howland, president and CEO of Greenfield Savings Bank, compared local banks’ roles during this pandemic to a boat rescuing people involved in a shipwreck. He said all businesses, even those ordered to closed because they have deemed non-essential, are essential to someone — because they provide a livelihood to the owners and employees.
“They’re struggling, they’re not open, they’re scared,” Howland said. “We are providing a lifeline for these people.”
Howland said he expects Greenfield Savings Bank to close approximately 600 PPP loans in a six-week period. To put that in perspective, the bank closed 300 commercial loans throughout 2019. He said on Thursday morning that 250 loans had been entered into the Small Business Administration system since Monday morning, with an average of just over $50,000 per loan.
Likewise, John Waite, executive director of the Franklin County Community Development Corporation, said the nonprofit has helped 30 to 40 people acquire PPP loans. He said the nonprofit reached out to its 100 current loan borrowers to ask if they needed deferments or some eliminated interest. About half took the offer. He said loans are not the ideal remedy because they saddle businesses with debt they didn’t need, however low the interest rate may be.
“At least this puts off some of their worries,” he noted.
Waite said the corporation, home of the Western Massachusetts Food Processing Center, recently closed two loans that were already in progress when the widespread economic halt started. He said clients who had sold food to restaurants and colleges have pivoted to focusing on grocery stores.
“Everybody needs to eat,” Waite said.
Additionally, the eight tenants of the corporation’s Venture Center have been told they will be allowed to temporarily not pay rent.
Reach Domenic Poli at: dpoli@recorder.com or 413-772-0261, ext. 262.