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Most Lincoln businesses likely to have to wait to apply for 2nd round of PPP loans
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Most Lincoln businesses likely to have to wait to apply for 2nd round of PPP loans

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When the initial Paycheck Protection Program went live in April, Union Bank and Trust was swamped with applications, approving several hundred the first day businesses could apply.

By the second day of the program, the Lincoln bank was the second-most active lender in the country.

However, Union Bank was not taking any applications Monday, the first day of the second round of PPP loan applications. That's because the Small Business Administration decided to start small and reserve the first few days for what are called community financial institutions, which includes development corporations and microloan intermediaries but not banks.

As of Monday, such organizations were able to take loan applications for first-time borrowers. On Wednesday, they can take applications from borrowers who got a loan during the original PPP program but meet qualifications to apply for a second loan.

The program opens up to banks sometime after Wednesday, although it's not clear exactly when that will be. The SBA on Monday said banks would be able to start taking loan applications "a few days later."

T.J. Casady, vice president for commercial loans at Union Bank, said the bank has been "receiving a lot of phone calls" from businesses with questions about the program and eligibility.

Casady said many of the bank employees who were involved in the first PPP lending effort have volunteered to help plan the second one.

"We know there are some businesses out there that are hurting," he said. "We want to be ready."

Barry Lockard, president of Cornhusker Bank, said his bank also has had a number of calls from customers wondering when they can apply. He said he wanted to get the word out that Cornhusker and many other community banks are ready to help whenever the SBA opens up the application process.

Businesses in Lincoln and Nebraska were heavy users of the program the first time around, with nearly 44,000 loans totaling $3.4 billion.

A number of those loans went to fairly large businesses, some of whom have weathered the pandemic quite well, and some of whom even wound up giving the money back without using it.

This time around, the SBA seems to be focused on ensuring small businesses who need the money the most have a fair shot at getting it.

“This updated guidance enhances the PPP’s targeted relief to small businesses most impacted by COVID-19," Treasury secretary Steven Mnuchin said in a news release. "We are committed to implementing this round of PPP quickly to continue supporting American small businesses and their workers.”

The SBA has set aside anywhere from $15 billion to $25 billion of the $284 billion available in the second round for very small businesses and those owned by minorities. It also is allowing hard-hit restaurants and other hospitality businesses to get bigger loans than other businesses, there are relaxed rules on what expenses the loans can be used for and flexibility in the repayment period.

And businesses with fewer than 300 employees that aren't a publicly traded company and which can demonstrate they had a 25% decline in gross receipts in any of the first three quarters of 2020 compared with a comparable quarter in 2019 are eligible to apply for a second PPP loan.

Lockard said he expects to see more second applications, although there still is an ample amount of businesses that did not apply the first time and likely are considering it this time around.

"We think we're going to see it on both sides," he said.

Lincoln Mayor Leirion Gaylor-Baird said in a news release Friday that she's "thrilled" that the additional loans are available to local businesses.

"This is good news for Lincoln businesses and our local economy,” she said.

Reach the writer at 402-473-2647 or molberding@journalstar.com.

On Twitter @LincolnBizBuzz.

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Business reporter

Matt Olberding is a Lincoln native and University of Nebraska-Lincoln graduate who has been covering business for the Journal Star since 2005.

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