‘Game day’: How the PPP process has changed since round one

On the morning of April 3, 2020, we logged onto social media to find that things were going less than smoothly on the first day Paycheck Protection Program applications opened.

With much of the country in shutdown mode since mid-March and payrolls running dry, there was an understandable panic in the air from business owners. Would the money run out? Would they be rejected? Was the website going to crash when they hit submit? To add to the anxiety, many financial institutions, which had been given a very short turnaround to put a process in place to issue the federal loans, weren’t accepting applications yet by midday on April 3.

In the ensuing chaos, a lot of funds wound up at companies they weren’t meant for. Lots of underserved businesses, especially businesses owned by people of color and rural small businesses, got left out. So when a second round of PPP was announced, we hoped for three things: more equity, more organization and less fraud.

The new PPP program would help prevent big businesses from scooping up funds before the small ones were out of the gate by only allowing community banks to get to draw first. These small financial institutions primarily cater to entrepreneurs and small businesses in underserved areas, making it, at least in theory, a more equitable way to start.

Access by larger banks started on Tuesday, Jan. 19. Barney Hughes, M&T Bank Business Banking’s regional manager, refers to it as “game day” — a big day for the institution that it wanted to “win” by serving every business that approaches it for help.

In the first round last spring, M&T processed loans for more than 2,400 Delaware businesses, representing 38,000 jobs saved. Forty-eight percent of the loans processed were for $50,000 or less — “so, practically half went to what I would define as a small business,” Hughes said.

Unlike some big banks, M&T, considered a mid-sized regional bank, does not contract out its PPP application process.

“We made a conscious decision not to do that so we don’t lose that connectivity and the experience going through the PPP journey,” Hughes said.

What’s different this year? One major thing is that you don’t need to have a preexisting business relationship with the bank to apply for PPP with it.

“It’s open to prospects,” he said, referring to non-customers who can become customers through the process.

Last time, businesses needed to be a customer if they wanted to apply for PPP through a bank — a barrier for many marginalized business owners. Now, smaller businesses, including sole proprietorship and single owner LLCs, may open a commercial account online and be qualified to use the bank’s new PPP portal, where thousands of bankers trained in the ins and outs of PPP help customers through the application process, that same day.

If the business is more complex, it’s recommended that you call your nearest branch for help in setting up an account, and then applying for a loan.

So far, M&T’s portal, which Hughes calls the “factory,” where applications are processed and issues fixed, has been going smoothly so far. You can access it through its website.