Valley banks secure disaster aid for small businesses but not without struggles

Apr. 29--Two Valley banks secured a combined $35 million for small business owners seeking emergency aid through the first round of the Paycheck Protection Program while a third was unable to gain authorized access to the lending system.

When the second round opened Monday, the lenders met the same struggles faced when the program debuted: demand overwhelmed the Small Business Administration's online loan portal, continually crashing the system.

Mifflinburg Bank & Trust secured $17.2 million for 131 local borrowers in the initial round ending April 16. Susquehanna Community Bank aided 113 local borrowers in receiving $17.8 million.

Northumberland National Bank found itself on the outside for the first round. According to J. Todd Troxell, president and chief operating officer, the SBA failed to allow access to banks like Northumberland since they weren't a delegated lender. The bank referred borrowers elsewhere.

The local lending totals juxtaposed against the technical glitches amid reports of wealthy corporations securing tens of millions in loans show the complexity of a now-$650 billion program rushed from inception to counteract fiscal calamity caused by the novel coronavirus pandemic.

"When you can't get in like this morning, that's very frustrating," Garry Benfer, senior vice president of loan administration and chief credit officer, Mifflinburg Bank & Trust, said Monday.

"Yesterday (Monday) was a really difficult day for our banks," said Duncan Campbell, president and CEO, Pennsylvania Bankers Association.

The reported volume of lenders attempting to access the system en masse made sense, Campbell. The first round saw staggered admission into a new program for lenders which, by Monday, had been better prepared for the second go-around.

It was still slow Tuesday, Campbell said, but there were improvements as applications started to be accepted overnight.

The Paycheck Protection Program (PPP) launched April 3 with an initial $349 billion in lending. Another $310 billion was approved in late April. There are avenues for borrowers to see their sums wholly forgiven.

Benfer said staff at the Mifflinburg-based banking system worked long past routine business hours to access the first-come, first-served money. They completed loan applications individually, steering away from third-party software, and had to reactivate their access to the SBA's online portal.

"After that, we were able to pretty much go in at a regular clip, enter loans into the system and get approvals," Benfer said. He added that every qualifying application the bank submitted was approved prior to the first round's abrupt end April 16 when funding ran dry. "I believe our lending staff nailed it," Benfer said.

According to Benfer, the bank secured one loan for a maximum $10 million. Removing that amount, he said the average borrower received $55,000. For the second round, Benfer said he expected lower totals: estimating perhaps 30 loans at $1.5 million.

Borrowers include Setebaid Services, Gilson Snow and Camp Mount Luther.

Setebaid generates 75 percent of its income in March and April. It provides social supports and summer camps for children with diabetes.

"The organization still has the same expenses but without income. Mifflinburg Bank & Trust Co. and the PPP loan are keeping the organization in business through the end of June," Mark Moyer, executive director, said.

Rebecca Yeager, marketing manager, Susquehanna Community Bank, said the West Milton-based banking system secured as much as $2.6 million for one borrower. The average amount including the top loan was $158,000, she said.

Yeager estimated at least 10 employees were working specifically on Paycheck Protection Program loans when the program reopened Monday.

"They were unable to submit any applications yesterday due to the system being overwhelmed. I'm sure other banks are dealing with the same stuff," Yeager said. "We're just really glad we're able to offer these loans. We know this is an unprecedented time and it's difficult for everyone."

President Donald Trump said during a media briefing Tuesday that the Paycheck Protection Program online portal saw double the traffic when it reopened Monday than it had during the first round. Trump also said smaller loan amounts, and more of them, were approved so far which he said was a sign smaller businesses were successful in securing loans.

The New York Times reported that as of early Tuesday afternoon, 475,000 loans exceeding $52 million combined were issued by 5,100 lenders. Community banks with less than $10 billion in assets secured 331,119 loans totaling nearly $30 billion, according to The Times.

Northumberland National Bank was authorized as an SBA-approved lender for Round 2, Troxell said. Staff at Northumberland successfully processed applications this week but not without issues.

"It was very challenging to get the applications through as the availability of the portal was sporadic throughout the day," Troxell said.

Troxell said SBA and the Treasury Department failed to provide enough guidance to non-SBA banks like Northumberland. It took "a lot" of calling other banks and trade groups to figure the system out. Troxell said the SBA did make late adjustments Monday and Tuesday to allow smaller lenders access to loan funding.

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